BURKE - According to court documents, foreign investors filed a motion opposing a $13 million settlement reached with Citibank following the EB-5 Fraud at Burke Mountain.
Receiver Michael Goldberg came to the proposed settlement back in late August when Citibank agreed to pay $13.3 million to Goldberg while retaining $3.7 million. However, none of the apportioned funds will make its way back into investors' pockets. Under the Vermont EB-5 Visa Program, investors must make a minimum investment of $500,000 and create 10 direct and indirect jobs. Investors held up their end of the deal and now have asked the court to hold up the other side.
The way the settlement currently stands, funds will instead go to Jay Peak Receivership to "rehabilitate their operations, pay outstanding debts, particularly wages, and compensate the Receiver for its services." The court documents continue, "It further appears that no portion of these settlement funds is being allocated for the purpose of compensating the defrauded investors". The investors called this bar order not fair and equitable and said it must be denied because it deprives them of property without compensation.
Investors are asking the court to order the Receiver "to perform a true-up on a dollar-for-dollar basis to account for the funds expended" instead. In other words, they asked for settlement proceeds to be evenly distributed on a prorated basis back to investor groups. Also, "requests that this court require the Receiver to segregate the settlement proceeds and deliver to Phase VII Investors a full accounting of the settlement funds, every 90 days, identifying the use of the settlement proceeds and any real estate project to which they are related" so they know where the funds are being spent.
The issue will be dealt further with in court on October 20, 2016.