Community Weighs in on EB-5 Scandal

burke moutain BURKE- Officials, community members and others began speaking out after the announcement last week that Q Burke Mountain Resorts and Jay Peak Resorts were under Federal investigation regarding the misuse of EB-5 funding and fraud charges towards Q Burke Mountain Resort owner Ariel Quiros and developer William Stenger.


This weekend Burke Mountain Academy, a private ski academy located at the base of Burke Mountain, commented on the controversy.

"We are deeply concerned about the immediate impact this will have on our community,"  BMA Board Chair William Booker said in a statement released Friday.


"We are working to better understand what the future holds, but do take some measure of comfort in Governor Shumlin's public commitment to operate the resort with 'minimal, if any, distrubtion to employment and services'"


"As a former operator of the resort ourselves, we are eager to help in any way that we can. For over 45 years the staff, alumni, family and friends of Burke Mountain Academy have endeavored to support the ownership of Burke Mountain believing that the interests of the mountain, the local community and out school are all directly aligned. We will continue to move forward with that in mind."

For some background: in early 2012, Stenger and Quiros purchased Burke Mountain and solicited EB-5 funds. Later in that year, major expansion projects were announced by the pair, including a $108million investment from donors associated with the EB-5 program, to use towards a four hotel addition to Q Burke Resorts. It was also announced by the pair that close to $600million would be spent between Burke, Jay Peak and Newport Center.


Construction for the hotel began in July 2015, but by December,-- which was the anticipated opening day -- it had become apparent that the hotel was at least a year behind schedule.


Later on, with management at Q Burke Mountain Resort still being optimistic in a speedy opening and hiring upwards of 300 new employees, the project contractor Jerry Davis, president of Peak CM announced that payments had not been begin received and threatened to shut down business. When Peak CM had still received no payments and Stenger was still promising the hotel's now January 15 opening deadline, a lien was filed by Davis revealing there was over 5.5 million dollars owned to Peak CM, asking for ownership of the property until debts have been paid.


After almost 200 employees were laid off and the hotel still had not opened, Governor Shumlin announced Thursday that Stenger and Quiros had now been charged with fraud, in what is said to have been a Ponzi-like scheme, using more than $200million from EB-5 investors for their personal agendas.


"Mr. Quiros allegedly used these funds for a variety of purposes, including his purchase of the Jay Peak and Burke Mountain Ski Resorts, payments of millions of dollars of his income tax obligations, and the purchase of a New York City Trump Place New York Luxury Condominium," Vermont Attorney General William Sorrell said.


"The truth is, this is very sad, very unfortunate and it's devastating to the region, to the Northeast Kingdom, to the economy, and the community. So my hope--our hope-- is that the mountain, regardless of who's leading it, we want it to be successful, it's an important part of the community." Lyndon State College President Joe Bertolino said of the situation.


Now, due to investigations, all assets have been frozen at both ski resorts, Stenger and Quiros have no access to any executive decisions, and Leisure Hotel and Resorts -- based out of Kansas City -- has been appointed to handle upkeep and overseeing operations of both resorts.


"Mr. Stanger and Mr. Quiros pursue to the Federal Court order and are prohibited from involvement in any EB-5 project," Sorrell said.


"Keep everything going here like we know and we will see when the dust settles,"  Tim Tierney, owner of Kingdom Trails, said, "We're here and the whole community is supportive of moving forward, it's a big piece of our community."


In the days following the fraud allegations, people from across the state say they were devastated with the news but hopeful that the Northeast Kingdom will recover from this and keep thriving as a huge tourist attraction in Vermont.


"Obviously we want a thriving Burke Mountain, we certainly do, and so I hope that there can be some kind of resolution that shows that Burke Mountain in some capacity does stay open, and encourages people to come shop, live and work in our area," Caledonia County Representative Jannsen Willhoit said.


Governor Shumlin called this situation a dark day in Vermont, and people are still questioning the situation, the charges and the use of EB-5 funds, but many are hopeful for a restorative future for Burke Mountain.


"It's good to hear that the state is taking action, I don't think it's quite right what's been going on at the Mountain."  Tyler Garrett, a Lyndon State College student, said.


"People are already upset with the whole situation,"  Kyle Phillips, a Burke resident, said. "They already kind of booted all the locals out and they tried to make it all better and add the hotel. That's great for the jobs, but now there are no jobs."


And looking into the future with EB-5, the United States Senate has agreed to make revisions to EB-5 legislation by September 13, 2016.


Senator Patrick Leahy, who has been hesitant about EB-5says the state should end the program all together.

"I think it's safe to say that EB-5 faces an uphill battle in the congress -- in both parties -- unless it's reformed," Leahy said.

 

Other Resources Regarding This Story:

Document Containing Complaints Against Quiros and Stenger

EB-5 and Its Impact on Q-Burke

Stenger, Quiros, Face Fraud Charges

Q-Burke Contractor Files Lien

Delays Mounting at Q-Burke Hotel