The federal government has upheld an earlier decision to close the Vermont Regional Center, citing the allegations of “massive” fraud at the Jay Peak ski resort and a lack of evidence that the state’s immigrant investor program promotes economic growth.
The United States Citizenship and Immigration Services dismissed the state’s appeal in a letter received by the state on Tuesday.
The record shows “numerous and significant negative factors demonstrating the limitations on its (the center’s) ability to continue to promote economic growth,” the citizenship agency wrote in its decision.
The negative factors involve the alleged fraud at Jay Peak. Former Jay Peak owner Ariel Quiros and former president William Stenger were accused in 2016 of misusing more than $200 million raised from foreign investors through the EB-5 visa program for developments at or near the resort. They have reached settlements with the Securities and Exchange Commission and the state and pleaded not guilty to federal charges over a failed plan to build a biotechnology plant.
“Since 2006, the Appellant has sponsored the Jay Peak EB-5 Projects that the SEC alleges have allowed Mr. Quiros and Mr. Stenger to engage in ‘an ongoing, massive eight-year fraudulent scheme’ that ‘systematically looted more than $50 million’ and ‘misused more than $200 million’ in EB-5 funds,” the USCIS wrote.
The insufficient oversight has led to a loss of investor confidence in the center, the agency wrote. It also questioned the center’s job creation figures and suggested that it first learned of concerns about the Jay Peak EB-5 projects several years before it notified USCIS.
In terms of promoting economic growth, the USCIS said most of the money raised – about 80% or $423 million – and jobs created were linked to the Jay Peak projects. About 20% of the total EB-5 capital that the center helped raise went to other ventures including Mount Snow Ski Resort and Trapp Family Lodge, the USCIS wrote.
The state had appealed the USCIS’ initial decision, saying it would be better to gradually wind down the center to protect investors and jobs. The state said Tuesday that the center is reviewing the decision and weighing its legal options. It could file a motion for reconsideration or appeal the decision to federal court, the state said.