Vermont Governor Phil Scott released a report on the EB-5 investor program, which states closing the Vermont Regional Center is an “appropriate action.”
The Governor says on August 18, the state received notice from the U.S. Citizenship and Immigration Service (USCIS), which administers the program on a federal level, of its intent to close the Vermont EB-5 Regional Center. The USCIS’s concerns were centered on alleged fraud by Jay Peak’s Ariel Quiros and Bill Stenger. The state has filed a civil fraud case against the men.
“The alleged fraud at the Jay Peak projects was devastating for the region, investors and contractors,” Scott said in a statement, “and has had a lasting impact on Vermont. It was critical as a new Administration to have an accounting of the lessons learned, as well as an analysis that could inform whether to continue or end operations of the Vermont Regional Center.”
According to a release from the Governor’s Office, the State would prefer what it calls a staggered approach to closing the Center, to minimize any economic impacts on existing projects.
“While the State has taken important steps to improve oversight of the EB-5 program since the alleged fraud was uncovered, the evolution of the EB-5 program across the U.S. and here in Vermont make closing the Vermont Regional Center an appropriate action,” Scott said.
Governor Scott called for the Vermont Department of Financial Regulation to conduct a review of the Vermont EB-5 program, after an April settlement with Raymond James Financial.
The final report outlines:
- The history of the EB-5 program, including the evolution of federal and state regulatory requirements
- The history of the VRC, including a review of its operations
- An examination of the State’s interactions with, and eventual investigation into, the Jay peak projects
- A review of the structural changes made to the VRC from a regulatory and oversight perspective
- Recommendations for the future of the EB-5 program and the VRC
In the report, DFR Commissioner Michael Pieciak, along with Michael Schirling, Secretary of the Agency of Commerce and Community development which manages the VRC, concluded the State took corrective actions in 2014 and now has stronger regulatory, compliance and oversight measures. The report recommends the Center not take on any new projects, but allows it to continue to oversee existing projects.
“As our report details, the Scott Administration agrees that the Center should ultimately by closed,” said Secretary Schirling. “It is clear from our review that state government was not, and is not, the best-suited entity for managing the EB-5 program. It is our hope that USCIS will agree with our approach for a staggered closure to minimize any adverse economic impact and ensure investors in existing, viable projects are protected.”