Tag Archives: Jay Peak SEC fraud

Stenger, Quiros, meet The Backstreet Boys – sort of

 

Yesterday, Miami lawyer Michael Goldberg was appointed by the SEC as the receiver to oversee and administer the assets of Q-Resorts’ EB-5 projects, now under a cloud of federal and state fraud charges.

The choices and arrangements made by Attorney Goldberg on behalf of the SEC as receiver will have big impacts on Vermont’s NEK. And after a ton of  litigation wallows its way through the courts, and depending on the outcome of those legal proceedings, the receiver is tasked to recover and protect funds and other assets the defendants have obtained in connection with the fraud and to distribute those assets to injured investors if a determination of liability is made.

And Michael Goldberg, Q-Resort’s SEC appointed receiver, has managed some of the largest Ponzi scheme liquidation recoveries in U.S. history, according to his bio.

A notable one he manged was as Trustee of the Louis J. Pearlman and Transcontinental Records estates  also known as Lou Pearlman’s twenty-year Ponzi scheme.

BSBoysPearlman, aka the “Svengali behind the ’90s boy-band craze,” created and managed the Backstreet Boys, and NSYNC. Pearlman was convicted of defrauding investors to the tune of $300 million by creating an airline and airline service company which did not exist. He tried to flee, but was caught on the run in Indonesia and brought to court.

Now, thanks to a simple twist of fate, the SEC (and indirectly to Carlo “Charles” Ponzi), Bill Stenger and Ariel Quiros share more with NSYNC’s Justin Timberlake than ever dreamed possible.

Q-Burke and EB-5, cue the lawyers

Well, well, well, here we have  Bill Stenger and Ariel Quiros’ EB-5 NEK Empire  suffering a full SEC body slam.Qdownside

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.