The Face of Vermont's EB-5 Scandal Gets To Go Home

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Created on Friday, 15 April 2022 22:37

Written by Hailey Morgan

VERMONT-William Stenger, the face of Vermont's biggest fraud scandal, was able to go home today after facing the possibility of a five year sentence. Federal Judge Geoffrey W. Crawford sentenced Stenger to 18 months in prison starting June 7th. He also faces three years of supervised release. The largest financial scam of Vermont's history started back in 2013. Stenger, the man behind the vision, finally got to hear his sentence on Thursday at Burlington's Federal Courthouse. Dozens of EB-5 immigrant investors lost millions of dollars to fund a biotechnology plant in Newport that never became a reality. His business partners, William Kelly and Ariel Quiros were part of the scandal. Attorneys say millions of funds were used for personal gain. The three also used a substantial amount of funds to pay off many financial debts connected to Jay Peak Resort and Burke Mountain.

The United States District Court Documents say, "he lied to investors, the Vermont Regional Center, U.S. Citizenship and Immigration Services, and the Securities and Exchange Commission." He was responsible for raising over 80 million from AnC investors. Engineered the earlier EB-5 projects at Jay Peak, and authorized tens of millions in cost overruns on the first two projects. He approved the misuse of investor funds to pay those cost overruns. Covering up the misuse of investor funds to investors, the VRC, and the SEC.

Judge Crawford heard from three victims out of the thirty six that Stenger owes at Thursday's sentencing. In total Stenger had been charged with one million six hundred sixty four thousand nine hundred twenty eight dollars, Judge Crawford lowering it to two hundred fifty thousand dollars on Thursday.

The first investor WeiWeing spoke about his experience talking with Stenger. He understood that Stenger was the manager of Jay Peak Resort. He expressed his disappointment in all the lost promises the EB-5 program could have offered him. He said he was originally intrigued to invest because of what the biotechnology plant could offer. However, even though the program did not go through and he lost an investment. He did not think jail time was necessary for Stenger. The next speaker Carlos Obando from Columbia shared this same opinion with Weing. He originally wanted to get involved because he was told this was a safe investment. But he wanted the judge to know that he would have invested anyway, even if Stenger was not involved.

Although, the last speaker did not share this opinion with the others. Rasha Mesharafa from Egypt said she was one of the very few that was able to get her citizenship. She thought the investment was a good idea after doing extensive research. She invested two million dollars in the project.

"I was one of the very first investors," Mesharafa said.

She said as the project went on, things began to look a little suspicious. "There were always excuses for not seeing results." After countless back and forth between her and Stenger, she asked to meet in person. When she did, she asked to see the site, and again another excuse. Stenger had told her that a snow storm had shut down the site the week of her visit. "I have a personal issue with Mr. Stenger, he lied to my face." She feels disappointed as there were no results, and no jobs. "I hold Stenger responsible." "He was the face of the project and he lied to me."

"I wish to apologize to employees, to the NEK, the state of Vermont, and all the EB-5 investors. I let you down, " Stenger told the court, adding that not a day goes by where he does not think about the remorse he feels.

The defense called Receiver Michael Goldberg to the stand. Goldberg, who has 30 years of experience, was appointed by the court in April of 2016 to investigate the finances of the projects and took control of daily operations at both Jay Peak and Burke Mountain. While his investigation of the project financials, he told the judge that he would refuse to work with Mr. Stenger if Stenger ever lied to him. Which he never did. His job as the receiver was to do extensive digging into bank statements to see where the missing money was going. During the investigation he found that he could not trace massive amounts of money back to Stenger.

In order for Stenger to be suspected of taking money, there would have to be a bank account connected to him. He admitted that the only person he found substantial evidence against in this case was Quiros. Who had control over many accounts. Mr. Quiros used thousands of dollars to buy several properties across New York and Vermont, a Divorce Attorney for his daughter, cars, and personal debts. The only money Stenger was found collecting was his normal salary. When Stenger was indicted back in 2019 Goldberg had to formally let Stenger go from his job as manager. But Stenger continued to assist Goldberg in managing the resort. Those duties included assisting on property check ins, securing buildings, helping with environmental issues, and property renovations. Goldberg referred to him as "the man on the ground."

"His help has been valuable," Goldberg said.

Quiros and Stenger settled the civil charges with the Securities and Exchange Commission. Quiros ended up giving back more than 70 million in assets. Court documents say Quiros pleaded guilty in front of Judge Crawford back in August of 2020 to conspiring with co-defendants William Kelly, Jong Weon (Alex) Choi. He also pleaded guilty to money laundering and to concealing material facts in a matter within the jurisdiction of a federal agency. His hearing will be held later this month. As for the biotechnology plant in downtown Newport, it sits abandoned waiting for the next opportunity.