Ex-ski resort exec gets 18 months in failed visa plan case

By AP News

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BURLINGTON, Vt. (AP) — The first of four men accused in a failed plan to build a biotechnology plant in Vermont using tens of millions of dollars in foreign investors’ money raised through a special visa program was sentenced Thursday to 18 months in prison.

BURLINGTON, Vt. (AP) — The first of four men accused in a failed plan to build a biotechnology plant in Vermont using tens of millions of dollars in foreign investors’ money raised through a special visa program was sentenced Thursday to 18 months in prison.

William Stenger, 73, the former president of the Jay Peak ski resort, also was sentenced to three years of supervisory release and ordered to pay $250,000 in restitution. He pleaded guilty last August to providing false documents. In exchange, nine fraud charges were dropped.

Stenger told the court he wished to apologize to his family, the employees of Jay Peak and Burke ski resorts, the state, the investors, and his community of Newport.

“I let you down,” he said, adding that he started out with the best intentions and “got lost along the way.”

Stenger and Miami businessman Ariel Quiros, the former owner of Jay Peak and Burke Mountain ski resorts, and two other men were indicted in 2019 over the failed plan to build the AnC Bio plant in Newport, Vermont, using millions raised through the EB-5 visa program that encourages foreigners to invest in U.S. projects that create jobs in exchange for a chance to earn permanent U.S. residency.

Rasha Mesharafa, who was from Egypt invested $2 million, testified virtually on Thursday that she had extensive communication with Stenger through email and became concerned about a lack of financial reports and delays with the AnC project. She said she went to Jay to meet with him and Stenger “lied straight to my face.”

“All of a sudden there is no money, no jobs, no project, absolutely nothing,” she said.

Mesharafa, who recently got her citizenship, said she “lived this nightmare for four years” and holds Stenger responsible.

Defense lawyers tried to pin the blame on the state, saying regulators suspected that there were financial troubles, but lifted a freeze on fundraising for the project from additional investors.

Former Department of Financial Regulation Commissioner Susan Donegan said Thursday a financial review was being done and it would have been premature to not allow the project to go forward. She said she was not pressured by then-Gov. Peter Shumlin to lift the hold on fundraising, but that he wanted the project to move forward.

Government lawyers say Stenger came up with the AnC Vermont EB-5 project idea, championed it, and lied to investors, the Vermont Regional Center, U.S. Citizenship and Immigration Services and the Securities and Exchange Commission about its revenue and job prospects. They say Stenger was responsible for raising over $80 million from investors “based on lies and deceit," according to a court filing.

The federal receiver appointed to oversee the ski resorts and the EB-5 projects “provided partial restitution” to the investors but the investor group is still “out millions of dollars,” prosecutors said.

Prosecutors also said in their sentencing memorandum that Stenger authorized tens of millions of dollars in cost overruns on earlier EB-5 developments at Jay Peak as well as the misuse of investor funds to pay those overruns.

Stenger's lawyers said his primary motivation has been to develop and improve the economy of Vermont's rural Northeast Kingdom and he saw the EB-5 program as a chance to create “good high-paying jobs,” according to court documents. They said he was not motivated by money like Quiros and Kelly were and has cooperated with and helped the receiver who was appointed by the court to oversee the resorts and projects.

Federal prosecutors requested a five-year sentence for Stenger, the maximum under the plea deal, while Stenger’s lawyers asked for home confinement.

A judge considered Stenger’s age, health, family circumstances and financial responsibilities in taking care of his wife, who also has health issues, but said the impacts on the victims is clear.

Three years before the criminal indictment, the federal Securities and Exchange Commission and the state of Vermont alleged that Quiros and Stenger took part in a “massive eight-year fraudulent scheme.” The civil allegations involved misusing more than $200 million of about $400 million raised from foreign investors for various ski area developments through the EB-5 visa program “in Ponzi-like fashion.”

Quiros and Stenger settled civil charges with the SEC, with Quiros surrendering more than $80 million in assets, including the two resorts. Quiros has pleaded guilty to criminal charges of conspiracy to commit wire fraud, money laundering and the concealment of material information in the failed plant plan and awaits sentencing. William Kelly, an advisor to Quiros, has pleaded guilty to two charges. A fourth man, Jong Weon (Alex) Choi, a businessman in South Korea, remains at large, according to the federal court.

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Author: AP News

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Originally published by Associated Press Valuethemarkets.com, Digitonic Ltd (and our owners, directors, officers, managers, employees, affiliates, agents and assigns) are not responsible for the content or accuracy of this article. The information included in this article is based solely on information provided by the company or companies mentioned above.

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