Well, well, well, here we have Bill Stenger and Ariel Quiros’ EB-5 NEK Empire suffering a full SEC body slam.
The SEC and the state of Vermont allege misuse of $200 million of investor funds by Jay Peak Inc. owners Stenger and Quiros.
‘‘The alleged fraud ran the gamut from false statements to deceptive financial transactions to outright theft,’’ said Andrew Ceresney, director of the SEC’s Division of Enforcement.
In Miami, a federal judge granted the SEC’s request to temporarily freeze Quiros’ assets and prohibit Quiros and Stenger from participating in projects associated the EB-5 program while the litigation is pending. A receiver has been appointed to oversee the Jay Peak and Q Burke resorts.
The allegations specifically suggest what many Vermonters have suspected for quite some time, that the massive NEK EB-5 developments were being run as a “Ponzi” like scheme.
VtDigger.com has the best rundown of yesterday’s seizure and today’s news about SEC: that charges were laid out in a federal court case in Miami, where Quiros lives. Digger has had an eye on this story and one reporter was asked to leave a meeting on Q-Burke property a couple weeks ago before the SEC charges.
It seems that nothing as complex or exotic as credit default swap contracts or complicated derivatives trading took place here in Vermont – just an old fashioned Ponzi scam. Pay the first investors off with money from the next batch of investors – just rinse and repeat as needed. It is kind of a quaint old scam really, except that it played so heavily on the hopes of NEK residents for jobs, decent development and an improving economic outlook for the historically depressed area.
One of the projects, AnCBio, was a proposed medical device business, and, according to the SEC, it has from the beginning been “rampant with fraud” and is now years behind schedule. AnC Bio started life as Ariel Quiros’ company called The Sports Seoul 21 Company Ltd.
Among one of the interesting charges in terms of convergence is that Ariel Quiros allegedly bought one of Donald Trump’s condos at Trump Place in Manhattan with funds from foreign investors. Trump himself has an approved EB-5 luxury hotel development in Jersey City, just a few miles from Quiros’ condo at Trump Place – maybe he can see it from his balcony.
Oh and Q-Burke won an award this week too!
Business Facilities, an online trade magazine, just named Q-Burke one the three most successful business achievers in cluster developments in the US for 2016. They got it half right, clusterwise: – it is likely to become known as one of the state’s award winning financial cluster-f#*ks.