Quiros reaches $82 million settlement in Jay Peak fraud case

The U.S. Securities and Exchange Commission has reached a settlement with Jay Peak owner Ariel Quiros in the Jay Peak fraud case, holding him liable for paying back $81.3 million and fining him an additional $1 million.

Quiros, along with partner Bill Stenger, was accused by the SEC in April 2016 of perpetrating a massive EB-5 fraud at Jay Peak and other locations in the Northeast Kingdom, misusing $200 million from foreign investors. Quiros was accused of personally profiting from more than $50 million.

The EB-5 program offers green cards to foreign investors in exchange for investing in projects in the United States that create jobs. Stenger and Quiros raised some $350 million for projects at Jay Peak, at Burke Mountain Resort and in Newport.

More: Lawsuit: Vermont covered up massive Jay Peak fraud

More: Jay Peak's Quiros will not fight SEC fraud charges

The SEC's final judgment against Quiros orders 17 properties, including the Jay Peak and Burke Mountain ski resorts and two New York City condominiums, and about $417,000 in frozen cash to be turned over to federal receiver Michael Goldberg to satisfy the $81.3 million Quiros owes, according to papers filed Friday in federal court in Miami.

Goldberg plans to sell the properties for the benefit of defrauded investors.

"In pursuing fraudulent actors, we seek not only to hold wrongdoers accountable, but also to return as much money as possible to victims," Eric Bustillo, director of the SEC's Miami Regional Office, said in a statement.

Quiros' attorney, Melissa Visconti, said in a statement: "We are very pleased to have taken another significant step in resolving all claims against Mr. Quiros."

Bustillo said the settlement achieved the SEC's objectives by "stripping" Quiros of the proceeds of his "fraudulent scheme," and by requiring him to turn over valuable property for the benefit of harmed investors.

"The SEC's emergency action halted an alleged massive fraud that Jay Peak, Quiros, and Stenger perpetrated on more than 700 investors from at least 74 countries," Stephanie Avakian, co-director of the SEC's enforcement division, said in a statement.

The settlement also requires Stenger to pay a $75,000 civil penalty. Stenger was not alleged to have personally profited from the fraud as Quiros allegedly did.

Quiros and Stenger agreed to settlements without admitting or denying the allegations in the SEC's complaint, according to the SEC.

News of the settlement was first reported Friday by the website VTDigger.

Quiros reached a tentative settlement with the SEC in November. Attorney Robert Levenson, representing the SEC, wrote in a motion that he and his staff had reached "a proposed settlement of the remaining issues in this action" against Quiros. The settlement requires the approval of the commissioners of the Securities and Exchange Commission. Levenson asked for 90 days to seek that approval.

Quiros did not oppose the motion.

In a joint statement, Attorney General T.J. Donovan and Gov. Phil Scott said the settlement will provide Goldberg the legal title to Jay Peak, Burke Mountain and other properties formerly owned by Quiros, enabling the federal receiver to sell to a permanent owner.

"However, more must be done to seek justice for Vermonters and the communities that have been harmed," Donovan and Scott said.

Even though Quiros and Stenger have reached settlements with the SEC, both face lawsuits from the state of Vermont. The U.S. Attorney's Office in Vermont also acknowledged in April 2016 that a criminal investigation was underway.

In the statement from Donovan and Scott, they referred to the investigation as "ongoing."

The lawsuits from the SEC and state of Vermont are civil actions.

Contact Dan D’Ambrosio at 660-1841 or ddambrosio@freepressmedia.com.