Home Biomedical research Valley News – Ariel Quiros, the ‘wheel dealer’ in Vermont’s EB-5 scandal, sentenced to 5 years in prison

Valley News – Ariel Quiros, the ‘wheel dealer’ in Vermont’s EB-5 scandal, sentenced to 5 years in prison

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BURLINGTON — Ariel Quiros, the former owner of Jay Peak Resort, was sentenced to five years in prison, the longest sentence of a trio of defendants who pleaded guilty to their role in a massive EB-5 fraud scandal that rocked Vermont.

Judge Geoffrey Crawford sentenced Quiros on Friday in federal court in Burlington. The judge also ordered Quiros to pay $8.34 million in restitution.

The sentence is less than the maximum prison term of about eight years that could have been imposed under a plea deal Quiros had with prosecutors. With good time won, Quiros should serve 85% of his prison sentence, or just over four years.

Quiros, 65, who now lives in Puerto Rico, showed little emotion and stood with his hands folded in front of him as the sentence was handed down.

“I deeply regret being involved in the case,” Quiros told the judge before his sentence was handed down.

Quiros later apologized to the court, the government and the people of Vermont, adding that he was “fully responsible” for his actions.

Announcing his sentencing decision, Crawford called the case the biggest fraud the state has ever seen — “at least it’s come to light,” he added.

Quiros was ordered to begin serving his prison sentence on July 26.

A pre-sentence report prepared by the federal probation office calculated that under the sentencing guidelines, which are advisory, Quiros would have been sentenced to between 12 and a half and 15 and a half years if the plea agreement n did not cap his maximum sentence at eight years in prison.

In August 2020, Quiros pleaded guilty to three of the twelve counts against him. These charges were conspiracy to commit wire fraud, money laundering and concealment of material information.

Quiros was indicted in May 2019 along with Bill Stenger, then chairman of Jay Peak, and William Kelly, a longtime friend and adviser to Quiros. They were all indicted in connection with a proposal to build a $110 million biomedical research facility in Newport, Vermont, known as AnC Bio Vermont.

Stenger and Kelly were each sentenced by Crawford earlier this month to 18 months behind bars.

Kelly was also ordered to pay $8.3 million in restitution, but he and Quiros share that responsibility. One or the other or both must pay this amount.

A fourth defendant also named in the indictment, Jung Weon (Alex) Choi of South Korea, remains at large.

Despite raising more than $80 million from 169 foreign investors, the biomedical center project was doomed from the start due to fraud, and almost no work has taken place at the Newport site, regulators say .

The investors each invested at least $500,000 under the federal EB-5 investor visa program and in exchange would receive green cards or permanent residency in the United States, provided their investment could be tied to the creation of the required number of jobs.

In 2016, three years before criminal charges were filed, federal and state regulators filed civil lawsuits accusing Stenger and Quiros of misusing $200 million of the more than $450 million they’ve raised from foreign investors under the EB-5 program.

More than 800 EB-5 investors from more than 70 countries poured their money into a series of eight development projects, some to provide massive upgrades to Jay Peak Resort and others for projects in Newport and Burke Mountain Resort.

Regulators, in court filings, said Quiros siphoned off about $50 million for himself, using some of the money to pay his taxes and buy luxury items, including a swanky New York apartment. .

‘I knocked the house down’

Prosecutors called Quiros the “wheel-dealer” of the trio – for the money and not wanting to stop the “sauce train” from moving forward.

Assistant United States Attorney Paul Van de Graaf, a prosecutor handling the case, did not recommend a specific prison sentence for Quiros.

He told Friday’s hearing that the sentence should be “substantial” but also take into account the cooperation Quiros provided to prosecutors as the first of three defendants to reach a plea deal.

In the past, Quiros has been named in court records as the “mastermind” behind the fraud that was committed.

Van de Graaf said he had a more “nuanced” view, adding that while Quiros was “drunk” on being rich, “others would hand him the bottle”.

The prosecutor said Quiros was the one who profited the most from the fraud in the AnC Bio case, estimating his take between $30 million and $37 million.

Attorney Neal Taylor, representing Quiros, argued that his client should receive a sentence similar to the five-year sentences handed down to the other two defendants in the case.

Taylor said the cooperation and information provided by Quiros as an “insider” and the first to reach a plea in the case helped Kelly and Stenger’s prosecution – and ultimately plea deals with them. also.

The defense lawyer said his client’s assistance “brought the house down”.

Melissa Damian, the lead attorney who represented Quiros for several years in civil lawsuits filed by regulators and other related lawsuits, was the only witness Taylor called to the stand to testify on her client’s behalf.

Damian, who is now a federal magistrate judge in Florida, said that since his first meeting with Quiros in 2017, he had been looking for ways to cooperate with the court-appointed receiver overseeing the assets at the center of the fraud case, including including the Jay Peak and Burke Mountain ski resorts.

Quiros eventually agreed to turn over $81 million in assets, including the two Vermont ski resorts, to the receiver to resolve the case brought against him by the Securities and Exchange Commission.

Damian described Quiros upon first meeting him as “confused” and “absolutely remorseful” once he realized what had happened was wrong.

Prior to hiring Damian to handle civil cases and Taylor to handle criminal cases, Quiros had vigorously fought the allegations against him. He hired new counsel in each instance after losing key decisions, including a motion to dismiss in the criminal case.

Pots and pans

In court Friday, Taylor said Quiros was a veteran who spent nearly two decades of his life in South Korea.

Quiros made his money before getting involved with Vermont’s EB-5 projects as an importer and exporter of goods, focusing on pots and pans, Taylor said.

The defense lawyer says that although his client was called the ‘mastermind’ of the fraud, it was Stenger who pulled the strings, since his client had no knowledge of running a station ski.

Later in the hearing, Crawford noted that he presided over the cases against all three defendants.

“No one has been keen to take credit for leading the AnC Bio project,” Judge said, adding that Quiros “stays center stage.”

Quiros attended Friday’s hearing alone, with only his attorneys accompanying him.

His legal troubles do not seem to have ended with the prison sentence handed down on Friday.

As he approached the door of the courthouse for Friday’s hearing, a man approached him and handed him a manila envelope.

“You have been served,” the man told Quiros.