Jay Peak EB-5 Scheme: Four Indicted in $200M Fraud

NEWPORT, VT – Four men are facing federal charges in what authorities are calling potentially the largest financial crime in Vermont history: a sprawling, multi-year wire fraud scheme connected to the Jay Peak Biomedical Research Park EB-5 investment project, known as the AnC Vermont project. The indictment, handed down by a federal grand jury, alleges a brazen deception of immigrant investors seeking green cards through the EB-5 program, leaving dreams shattered and a small state reeling.

Charged are Ariel Quiros, 63, of Florida; William Kelly, 70, also of Florida; Jong Weon Choi, aka Alex Choi, 58, of South Korea; and William Stenger, 70, of Newport, Vermont. The indictment details accusations beyond the wire fraud conspiracy, including six separate counts of wire fraud, and numerous counts of concealing material facts and making false statements to United States Citizenship and Immigration Services (USCIS), the agency overseeing the EB-5 process. Quiros additionally faces two counts of money laundering. The scheme allegedly continued even as the Securities and Exchange Commission (SEC) investigated the Jay Peak EB-5 offerings, seeking new investors for the AnC project. A prior civil action by the SEC ultimately stripped the defendants of control.

“As alleged in this indictment, this scheme defrauded hopeful immigrant investors in what may be the largest financial crime in our state history,” stated United States Attorney for the District of Vermont, Christina E. Nolan. “I commend our prosecutors and our partners in the FBI, IRS, and FDA-OIG for their dogged investigation of this complex fraud that shook our small state. This indictment demonstrates that the U.S. Attorney’s Office is determined to address the most challenging cases, and that we have the talent, will, and resources in our office and law enforcement agencies to meet those challenges.”

The indictment paints a picture of a scheme that began in 2011 and continued until April 2016, when the defendants lost control of the project. The AnC Vermont project represented the seventh EB-5 project managed by Quiros and Stenger, but the first to venture beyond the confines of a ski resort. The government alleges they misrepresented facts and misused investor funds, funneling tens of millions of dollars based on false promises. James N. Hendricks, Special Agent in Charge of the Albany Field Office of the Federal Bureau of Investigation, minced no words: “This case is about greed and deceit…The defendants’ broken business promises have left not only a physical scar on the city of Newport, but also an intangible scar on the promise of economic development for the Northeast Kingdom and on the dreams of many hopeful immigrants.”

Investigators say the fraud was uncovered through diligent tracing of investor funds. “As alleged in the indictment, the defendants obtained tens of millions from investors in connection with an EB-5 offering that was based on misleading statements and involved a misuse of the money raised,” said Kristina O’Connell, Special Agent in Charge of IRS Criminal Investigation, Boston Field Office. “IRS-CI’s tracing of the investors’ funds helped investigators uncover the breadth of the alleged fraud and we are proud of our role in this collaborative law enforcement effort.” The defendants now face a maximum penalty of 20 years in prison, three years of supervised release, a $250,000 fine (or twice the gross gain or loss), and are subject to restitution orders for the victims. The indictment also seeks forfeiture of assets obtained through the alleged scheme.

While the charges are merely allegations at this stage, and the defendants are presumed innocent until proven guilty, the scope of the alleged fraud is undeniable. The investigation, a collaborative effort between the FBI, IRS, FDA-OIG, and the U.S. Attorney’s Office, sends a clear message: those who exploit government programs and prey on the hopes of others will be held accountable, no matter how complex the scheme or how far-reaching the consequences. The case is ongoing, and further details are expected to emerge as the legal process unfolds.