Jay Peak is a Vermont ski resort and known as both the largest EB-5 fraud of all time as well as the largest fraud of any kind ever in the state of Vermont.
The term “Jay Peak” is commonly used to describe the fraud as a whole which entailed eight EB-5 funded projects in Vermont’s Northwest Kingdom — seven ski resorts and a bio-medical facility project that was never built.
Ariel Quiros is the developer and “mastermind,” according to the SEC, behind the massive fraud. He was aided by associates William Kelly, Bill Stenger, and Jong Weon (Alex) Choi.
In total, the projects raised $350 million of EB-5 investor capital and $200 million was misused on unrelated projects and on Quiros’ personal expenses.
Quiros never served prison time for the actual Jay Peak resort project fraud and settled with the SEC. The settlement terms included that he would disgorge over $81 million, pay a $1 million penalty, and hand over all of the EB-5 funded properties to a court-appointed receiver who would attempt to sell them in order to recoup a portion of investor losses.
In 2022, a Utah resort group won the auction to buy the infamous ski resort for a price of $76 million. It remains to be seen how much the defrauded investors will receive from proceeds.
However, Quiros finally was eventually sentenced to prison for his role in one of the eight projects, the AnC Vermont biomedical project scam. The EB-5 project raised $93 million from 169 EB-5 investors but was never built.
Quiros admitted to three felony charges: wire fraud of investor capital, money laundering, and concealing material facts in a matter involving a federal agency. He was sentenced to 60 months in prison, ordered to serve a three-year term of supervised release, and ordered to disgorge $8,338,600.77.
“The defendants’ scheme impacted the lives of many hundreds of individuals, including not only investors from all over the world who dreamed of one day becoming United States citizens,” said a U.S. attorney in the AnCcase,” but also Vermonters in Northeast Kingdom communities who hoped for the economic development and new jobs that the defendants promised to deliver.”
Stenger and Kelly were both sentenced to 18 months in prison and o three-year supervised release term. Choi remains at large.