Quiros Pleads Guilty in Massive EB-5 Fraud | Off Message

Quiros Pleads Guilty in Massive EB-5 Fraud


Ariel Quiros (left) with his former lawyer, Seth Levine, after a court hearing last year - PAUL HEINTZ ©️ SEVEN DAYS
  • Paul Heintz ©️ Seven Days
  • Ariel Quiros (left) with his former lawyer, Seth Levine, after a court hearing last year
The Florida businessman accused of masterminding what may have been the largest financial fraud in Vermont history pleaded guilty on Friday in exchange for assurances that he will serve no more than eight years in prison.

Ariel Quiros, 64, the former owner of Jay Peak and Burke Mountain ski resorts, appeared at a virtual hearing in federal court in Burlington on Friday morning and admitted to conspiring to commit wire fraud, laundering money and making false statements. The charges stem from a massive embezzlement scheme in the Northeast Kingdom involving the EB-5 program, which offers foreign investors U.S. residency in exchange for $500,000 investments in approved job-creating businesses.

Quiros, who spoke little during the hearing beyond answering procedural questions and entering his plea, has agreed to cooperate with prosecutors against two of his former business associates:  Bill Stenger, Jay Peak’s former president and CEO, and William Kelly, of North East Contract Services.

In exchange for his cooperation, prosecutors dropped nine other pending charges and agreed not to seek forfeitures in the event the court seeks restitution for his crimes. He could face up to 97 months in prison under the agreement, though a judge could sentence him to less.

Asked about the plea during his Friday press conference, Gov. Phil Scott said it “had taken a long time” to get to this point. “In some respects, maybe, we all knew he was guilty, and he finally admitted to that," Scott said. "So it’s a step forward.”

Vermont Finance Commissioner Michael Pieciak had a similar take.

“Mr. Quiros’ guilt was beyond doubt," Pieciak said in a statement after the hearing. "Our department’s ten-month investigation traced every penny of investor money and determined that much of it had inappropriately been funneled to support Mr. Quiros’ lavish lifestyle."

Quiros, Stenger and two of their associates were indicted last year on federal charges accusing them of misleading foreign investors and EB-5 program regulators in order to embezzle millions meant for a Newport biotechnology business.

The project, named AnC Bio Vermont, was supposed to operate an advanced biotechnology company involving stem cell therapy. But authorities said nearly none of the more than $90 million collected from foreign investors for the project actually went toward its completion; final designs were never even finished. 

Instead, the men skimmed millions from the investment funds for personal enrichment, according to last year's indictment. Much of the money was diverted as collateral and to pay off Quiros' other loans. 

Quiros and Stenger have also been accused of making false statements to the U.S. Securities and Exchange Commission in attempts to convince it to end an investigation that began in 2013. The feds sued the men in 2016, describing their EB-5 projects as "Ponzi-like," and later seized control of the ski resorts. A court-appointed receiver is now hoping to sell the resorts.

Stenger, a longtime Vermont resident, has been described as the front man by federal prosecutors, allegedly recruiting investors and leveraging "personal connections" to "garner support" from politicians. At a hearing last spring, Stenger's attorney strongly denied that he participated in illegal activity.

Quiros' attorneys requested that he not be sentenced until the other two defendants were sentenced, if convicted. Stenger's counsel pushed back on the request, but prosecutors agreed with the recommendation and a federal judge accepted it on Friday.

The cases against Stenger and Kelly are scheduled to go to trial next year. Both have pleaded not guilty.

Kevin McCallum contributed reporting.

Correction, August 28, 2020: A previous version of this story misidentified Stenger as a "native" Vermonter.