Vermont Attorney General T.J. Donovan is challenging the veracity of an explosive claim that an attorney for investors defrauded in the EB-5 scandal made on Monday.
After a court hearing on the investors' lawsuit against state officials, Stowe attorney Russell Barr told reporters he has evidence that one of the 10 defendants had been arrested on an EB-5 trip to China in "2013 or 2014" for "having sex with a minor" and was bailed out by another state official.
Barr declined to provide additional information, but said he would include it in future court filings.
In a statement Tuesday, Donovan said that Barr filed a public records request in November seeking state documents pertaining to "an arrest, detainment or holding of any state employee while traveling overseas in promotion of the Vermont Regional Center and its related projects."
Others made similar requests in 2014, Donovan said. No such records exist, Donovan said.
"Any allegation of child sexual abuse by a state official, should be investigated regardless of where it occurred," Donovan said. "I call on attorney Barr to immediately turn over the evidence he has to the proper authorities whether they be state, federal or international so this matter can be properly investigated."
In his response Tuesday evening, Barr did not back down.
“The Attorney General’s Office concedes that any allegation of child sexual abuse should be investigated regardless of where it occurs,” Barr said. “It has known about these allegations for almost four years. What investigation did it conduct when it learned about them, and what were the results of that investigation? Did they question the officials on these trips? Did they put them under oath? What did they learn? Or did they intentionally avoid opening an inquiry?”
Donovan became attorney general in 2017.
In 2016, the U.S. Securities and Exchange Commission filed a civil lawsuit against former Jay Peak Resort owner Ariel Quiros and president Bill Stenger, alleging that they misused $200 million in investments over eight years for projects in Jay, Newport and Burke. Both men have settled with the SEC.
The investors, who each put $500,000 into Northeast Kingdom projects in return for permanent U.S. residency, argue that state officials played a key role in what federal investigators have called a "Ponzi-like" scheme.