The biggest economic development plan in VT history was the biggest fraud in VT history
Long before this story broke I wrote here that it was a ponzi scheme. How did I and so many others in the Kingdom know? Just begin with the loony promise to provide over 10,000 jobs. Newport is a town of 5,000. Orleans County where Newport is located has a population of 27,000. There isn't remotely the infrastructure to support what they said they were going to do. In addition, I know several people who worked construction at Jay Peak which was stage one of the plan. They were all hired to fix the shockingly bad work. That was 2 years ago.
The hardest thing for a lot of people in the Kingdom, is feeling betrayed by Bill Stenger who was both beloved and respected here. No one knew anything about Quiros. Now we know he spent some of the money he bilked out of investors, to buy a pad in Trump Tower.
An entire block was razed in Newport, Vt., more than a year ago in the expectation of a new “renaissance” development that was promised by two businessmen but has yet to materialize; the businessmen have been accused of “massive fraud.”
NEWPORT, Vt. — Jo-Ann Brooks grimaced as she looked out the window of her jewelry store in this tiny town in northern Vermont, near the Canadian border. Across Main Street, an entire block of shops and apartments was razed more than a year ago in the expectation of a new “renaissance” development that has yet to materialize. In its place is a gaping hole, with old concrete cellars.
“We call it Little Beirut,” Ms. Brooks said. “It looks like it was bombed.”
The hole is a visual monument to the failed plans of two ambitious businessmen who vowed to revitalize this struggling region, known as the Northeast Kingdom. With an $850 million dream, they promised the biggest economic development in Vermont history. They planned to finance it through a federal program that allows wealthy foreign citizens to invest $500,000 in projects in distressed areas in return for green cards, leading to permanent residency in the United States.
Instead, the two have been accused of perpetrating the biggest fraud in Vermont history — as well as in the history of that federal visa program, known as EB-5.
The businessmen, Ariel Quiros and William Stenger, raised $350 million through the EB-5 program from hundreds of foreign investors from at least 74 countries. The money was intended for an array of projects, including a ski resort, hotels and a biotech research firm. Instead, according to a 52-count civil complaint filed last month by the federal Securities and Exchange Commission and a 15-count civil complaint filed by the State of Vermont, they engineered a “massive eight-year fraudulent scheme” in which they “systematically looted” millions of dollars out of the foreign investors.
The complaints said the two used a “Ponzi-like” scheme to divert $200 million intended for future projects into a dizzying swirl of fraudulent accounts set up to try to keep earlier projects afloat. Some were completed, others were not. In addition, Mr. Quiros was accused of siphoning off $50 million for his personal use, which included buying a luxury condominium in Trump Place New York.
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The allegations against Mr. Stenger particularly stung people here because they had known him for decades as a friend and civic-minded neighbor. He was not accused of siphoning money for his personal use, but the S.E.C. said he “extremely recklessly ceded control of investor funds to Quiros” and “did almost nothing to manage investor money, even when confronted with red flags of Quiros’ misuse.”
In an email interview, Mr. Stenger said he could not discuss the specific allegations against him. But in his most extensive comments yet on the situation, he said he knew he had let people down.
<snip>http://www.nytimes.com/2016/05/11/us/fraud-charges-mar-a-plan-to-aid-a-struggling-vermont-region.html