HYDE PARK, Vt. - A new allegation in the EB-5 scandal that shook Vermont's Northeast Kingdom in 2016 was revealed Monday by a Stowe attorney. Russell Barr claims a state official had sex with a minor while on a promotional trip to China.
Barr said, "We have solid information that an official on Vermont Regional Center/Jay Peak business was arrested for a crime."
Barr is an attorney representing five foreign investors who claim they were defrauded by the Vermont Regional Center, which oversees the state's EB-5 program.
The arrest claim was not heard in court Monday as the judge said it fell outside the original complaint.
Barr told reporters, "One of the other officials on the trip actually bailed out that official so we are trying to figure out who bailed out the other official and why wasn't this explained to our state and to our citizens."
Barr says he will make an amendment to the complaint over the next couple of weeks.
EB-5 is a federal program that offers permanent residency in the United States to foreign investors who fund local development projects. In this case, projects at Jay Peak Resort.
Investors say Vermont was negligent and allowed their money to be misused by the resort's former owner Ariel Quiros and former president/CEO Bill Stenger.
"Being removed from this country when the whole notion of the duty was to ensure that you could be here with your family and make residence here in the United States of America," said Chandler Matson, Barr Law Group.
The state is fighting to have the entire case dismissed saying it's immune to such charges.
"Talking about the discretionary function exception, these are all discretionary judgement calls obviously the plaintiffs disagree the way they were made but they are ultimately questions of discretion and judgement," said Benjamin Battles, Vermont Assistant Attorney General.
Court paperwork shows around $200 million was funneled through the Ponzi-like scheme.
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