2017 The Al Neuharth Innovation in Investigative Journalism Award, Small Newsroom finalist

Jay Peak’s Path to Fraud

Anne Galloway, Alan Keays, Mark Johnson, Erin Mansfield, Ruth Hare


The Al Neuharth Innovation in Investigative Journalism Award, Small Newsroom


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About the Project

Regulators last year charged two Vermont developers with 52 counts of securities fraud and the misuse of $200 million in EB-5 immigrant investor funds. It is the largest fraud in the history of the EB-5 visa program.

In April 2016, the Securities and Exchange Commission accused Jay Peak Resort CEO Bill Stenger and owner Ariel Quiros of perpetrating a Ponzi-like development scheme in northern Vermont. The properties, including two ski areas, are now in receivership. Both developers are now cooperating with federal regulators.

Raymond James Financial Services, which allowed the developers to borrow against EB-5 monies, settled with investors for $150 million in April.

VTDigger investigated allegations that Stenger and Quiros had abused investors and misused funds two years before the SEC brought charges.

Since the federal lawsuit was filed last year, we have exposed crucial facets of the alleged fraud that have not yet been explored by federal regulators.

  • We detailed how the developers sold the same fifth floor of a hotel to two separate sets of investors.
  • In South Korea we found that a business associate of Quiros’ had bilked foreign investors in a stem cell research and artificial organ manufacturing facility. Quiros then brought the scam to Vermont.
  • We reported that state officials charged with overseeing the projects through the Vermont EB-5 Regional Center program were warned about financial improprieties at Jay Peak. A former business partner tipped off state officials about the scheme in May 2012 — four years before the SEC brought charges. State officials ignored his warning, and told him he could no longer do business in the state.

The Vermont Attorney General has repeatedly blocked records requests from VTDigger regarding the state’s complicity in the fraud. At one point, state officials said they would charge $200,000 for EB-5 records.

State officials have insisted that the Vermont EB-5 Regional Center was continuing to operate, even though the program appeared to be defunct. We sued for records and found that the U.S. Citizenship and Immigration Service has threatened to terminate the regional center. This spring, lawmakers eliminated the budget for the EB-5 center, effectively killing the program.