Tag Archives: Bill Stenger

Is California’s new EB-5 scandal more scandalous than ours?

International, National, , , ,

Vermont’s massive EB-5 scandal at Jay Peak broke about a year ago, and it isn’t the only federal investments-for-visas program that may be riddled with fraud. But the latest EB-5 scandal involves international politics, foreign fugitives and even a Trump cameo.fraudawards

The FBI in California raided offices, a townhouse and home associated with The California Investment Immigration Fund alleged to be involved in a substantial EB-5 investment company fraud. The company solicits EB-5 funds mostly from Chinese investors. And the majority of all U.S. EB-5 funds come from Chinese citizens.

Interestingly the FBI raids took place on Saturday while president Trump and Chinese president Xi Jinping were meeting in Florida at Donald’s ersatz palace.

The FBI raids, […] were focused on California Investment Immigration Fund (CIIF), a business allegedly connected to abuses of the controversial EB-5 Immigrant Investor Program that has in recent years fueled a high-end US residential boom and has been widely used by developers including the president’s son-in-law and adviser, Jared Kushner.

Since 2008 attorney Victoria Chan, her father Tat Chan, and Fang Zeng harvested $50 million from more than 100 Chinese investors for CIIF and related companies.

[…] instead of legitimately investing the funds into US businesses, the trio either refunded the funds to the EB-5 investors while their petitions were pending in a way to solicit investors, or stole millions of dollars to use for personal expenditures, including buying million-dollar houses

That list of allegations should sound familiar to anyone who followed the exploits of Jay Peak partners Stenger and Quiros. But as often happens California goes one better because this fraud may involve three fugitives from China – on their most-wanted list – illegally obtaining U.S. green cards.

According to China Daily, among CIIF’s investment green card clients found on the fugitive list are Xu Jin (No. 13) and his wife Liu Fang (No.66). In China they are both accused of embezzlement, accepting bribes, and abuse of power, for which the maximum penalty is death. A third is identified only by the initials “K.L.,” and no crimes the mysterious unnamed fugitive may have committed in China are included.

Not to downplay  Stenger and Qurios’ alleged EB-5 fraud at Jay Peak, but strictly in terms of staging and dramatic casting, California’s EB-5 scandal may outclass ours – Vermont just can’t match the international intrigue or top cameo performances by the Trump family.

Get to the bottom

Business, local/regional, , , , , ,

It has been a busy week since the SEC locked up Q-Burke and cracked down on Stenger and Quiros’ “Ponzi like” EB-5 scheme.

One thing that has grabbed a lot of attention is a “batch” of emails from the Shumlin administration that had been slated to be deleted.  Speculation is rampant about the timing – why in early April, prior to the SEC action, this batch of correspondence was slated to be wiped.EB-5 chart 1

They reportedly may contain correspondence between Shumlin’s former staff member Alex MacLean, who was then working for Jay Peak’s Bill Stenger, and the governor’s office. Administration officials say the request to delete was routine. And they want them made public however Attorney General Sorrell is said to be reviewing the issue.

Now The Vermont House has scheduled a debate for Friday to consider a proposed resolution calling for the release of the emails, joining several candidates for governor and others requesting the contents be made available to the public.

Rep. Chris Pearson (P-Burlington), who heads the House Progressive caucus, says there’s an easy way to put to rest any lingering questions.

“I agree with a whole lot of Vermonters that something seems very fishy here,” he said. “But I’m not asserting anything. I’m saying: Show us the emails and prove it to us.”

To that end, he and four fellow Progressives have introduced a resolution asking Shumlin to deliver the emails to a House committee by May 1.

Maybe it is worth asking this: Is it more likely the email batch is simply an embarrassment (a big one perhaps) for the Shumlin administration, or could it be a smoking gun?  I’d bet on embarrassment over smoking gun. So good: “show us the emails” because the longer it hangs fire the more suspicion gathers.

But if the point is to get to the bottom of how the state allowed this Ponzi scheme to happen, why not start at the bottom rather than the top?

Not exactly the bottom, but how about at the state Agency of Commerce and Community Development(ACCD). This would be the state agency that had the schizophrenic task of promotion and oversight of approved EB-5 programs until February 2015 when oversight began to be shared actively with the Department of Financial Regulation (DFR).

The ACCD’s directors of the Regional EB-5 Center for both the Douglas and Shumlin administrations had day-to-day dealings and traveled extensively overseas in support of Jay Peak and Q-Resorts’ team.

In their designated role former Regional Center Directors James Candido (Douglas’ man) and  Brent Raymond (Shumlin’s former Director) were the faces Vermont presented to foreign investors. Their attendance at worldwide EB-5 conventions signaled Vermont‘s stamp of approval for Jay Peak /Q-Burke, helping  Stenger and Quiros gather funds.

Considering the scale of fraud alleged could state officials so familiar with the operation not have expressed some worries or had suspicions? And just what was the calculus that weighed in favor of ignoring the tell-tale signs, of favoring the developers-cum (alleged) robber barons over their responsibilities to the people of Vermont and the (alleged) foreign-investor-victims?

At some point Vermont’s  combination “watchdog” and enabling agency – going back to the Douglas daze – deserves as much or more attention than Shumlin’s batch of emails is now getting. The Regional EB-5 Center was there helping sell the snake oil from the start. What did the directors know and when might they have known it ?

Q-Burke and EB-5, cue the lawyers

Business, local/regional, National, , , ,

Well, well, well, here we have  Bill Stenger and Ariel Quiros’ EB-5 NEK Empire  suffering a full SEC body slam.Qdownside

The SEC and the state of Vermont allege misuse of $200 million of investor funds by Jay Peak Inc. owners Stenger and Quiros.

‘‘The alleged fraud ran the gamut from false statements to deceptive financial transactions to outright theft,’’ said Andrew Ceresney, director of the SEC’s Division of Enforcement.

In Miami, a federal judge granted the SEC’s request to temporarily freeze Quiros’ assets and prohibit Quiros and Stenger from participating in projects associated the EB-5 program while the litigation is pending. A receiver has been appointed to oversee the Jay Peak and Q Burke resorts.

The allegations specifically suggest what many Vermonters have suspected for quite some time, that the massive NEK EB-5 developments were being  run as a “Ponzi” like scheme.

VtDigger.com has the best rundown of yesterday’s seizure and today’s news about SEC: that charges were laid out in a federal court case in Miami, where Quiros lives. Digger has had an eye on this story and one reporter was asked to leave a meeting on Q-Burke property a couple weeks ago before the SEC charges.

It seems that nothing as complex or exotic as credit default swap contracts or complicated derivatives trading took place here in Vermont – just an old fashioned Ponzi scam. Pay the first investors off with money from the next batch of investors – just rinse and repeat as needed. It is kind of a quaint old scam really, except that it played so heavily on the hopes of NEK residents for jobs, decent development and an improving economic outlook for the historically depressed area.

One of the projects, AnCBio, was a proposed medical device business, and, according to the SEC, it has from the beginning been “rampant with fraud” and is now years behind schedule. AnC Bio started life as Ariel Quiros’ company called The Sports Seoul 21 Company Ltd.

Among one of the interesting charges in terms of convergence is that Ariel Quiros allegedly bought one of Donald Trump’s condos at Trump Place in Manhattan with funds from foreign investors. Trump himself has an approved EB-5 luxury hotel development in Jersey City, just a few miles from Quiros’ condo at Trump Place – maybe he can see it from his balcony.

Oh and Q-Burke won an award this week too!

Business Facilities, an online trade magazine, just named Q-Burke one the three most successful business achievers in cluster developments in the US for 2016. They got it half right, clusterwise: – it is likely to become known as one of the state’s award winning financial cluster-f#*ks.

Q-Burking* Mountain

local/regional, , , ,

In 2014, right out of the gate, reports were that Bill Stenger and Ariel Qurios’ Burke Mountain project got off on the wrong foot when a name change clashed with local sensibilities.Burkenbottle

 It’s off to a rocky start. When Quiros bought the ski area, many locals and loyal skiers bristled that he changed its name to Q Burke Mountain — a move they perceived as arrogant.

It wasn’t purely arrogance; it was just that sending a message — the winners are now in charge — to potential EB-5 investors was deemed infinitely more important than the opinion of the locals:

 Quiros says the name change is a message to investors. […] But Burke Mountain’s international reputation for chronic failure was worthless to him. He needed to change the name to associate “Burke” with his and Stenger’s success at Jay Peak, which businesspeople know is owned by Q. Resorts.fb-logo

Fast forward to this past week, where at Q-Burke Mountain hotel and conference center events are taking an interesting turn. The new hotel opening was delayed due to a multi-million-dollar dispute with the general contractor. An announcement of 180 layoffs of local employees followed quickly.

Partners Bill Stenger and Ariel Quiros wasted no time laying off the blame elsewhere:

In a swipe at the state, resort officials said in the news release announcing the layoffs that “Q-Burke Mountain Resort has worked diligently to create jobs and to retain personnel even through rough times, however, job creation, job retention, and economic development do not seem to be as important to the state as previously believed.”

It may not be easy to pass that one off with a straight face. After all, Vermont has been promoting (some might say pimping) the Q-Burke and the Jay Peak developments to potential EB-5 foreign investors. Motivated by the prospect of NEK jobs, Vermont has been marketing them around the globe as a sound investment almost from the start. In fact, it took multiple loud complaints from disgruntled Jay Peak investors and an SEC investigation before the state tightened up its accounting enforcement.

Why growl and snap at the hand that enables your EB-5 money habit? Same reason they added “Q” to Burke, a message to investors, which in this case is: it’s not our fault and keep investing. Because one season of bad weather, reports of unpaid bills and the specter of a hulking empty hotel could slow their foreign investment to a trickle-when they need gallons per hour.

And, in closing let’s return to Burke 2014 and “Q” arrogance:

Quiros understands the community doesn’t like the new name, he says. But he believes they’ll come to appreciate the value it brings, once he proves the long-term value of his plan. He thought about public perception “300 percent,” and stands by his decision.

“If I make a mistake here, I lose everything! I lose everything,” Quiros says. “Because in the world market, I don’t get the money from a bank. I get from word of mouth.”

Exactly “300 percent” right: no money from banks. It comes through the State and Federal EB-5 Immigrant Investment Program. Chances are Vermont will get over the criticism (because of the promises of local jobs). But maybe it’s a risky strategy to dump on the state after they have helped provide a steady stream of investors. T rump

And there are plenty of other EB-5’s in other states begging for foreign investors. Donald J. Trump’s got one, a huge, beautiful, luxury Jersey City Hotel and conference center for example … just a coupla minutes from Manhattan and it’s huge , HUGE!

*“Burking” : originally meaning to smother,  but which later passed into general use as a word for any suppression or cover-up.

Donald Trump is an EB-5 funded developer

Business, National, , ,

It seems Donald Trump and Vermont’s NEK mega developer Bill Stenger have something in common-they both love EB-5 investors from China.

Considering all his anti-immigration and China is “killing us,” stealing our jobs and money rhetoric, Trump surprisingly has no qualms accepting Chinese investor financing for a development project in New Jersey under the Trump® name. chairmantrump1

The Federal EB-5 visa program provides foreign investors with a US green card, for them and their families, and (after two years) permanent resident status in exchange for agreeing to invest $500,000 in an approved US business.  In recent years the majority of EB-5 foreign investment funds have been from wealthy Chinese. EB-5 provides a “safe” place for their cash outside of China. Is it possible Donald’s EB-5 immigrant investors are issued a Trump visa card?

The Trump investors’ EB-5 money is for a 50-story luxury apartment building in New Jersey only a short distance from Lower Manhattan. It is licensed under the Trump name and run by the Kushner Company. Jared Kushner is married to Trump’s daughter Ivanka.

Kushner Companies is a New Jersey-based real estate firm built by Kushner’s father Charles, a former rainmaker in New Jersey Democratic politics who pleaded guilty to a federal campaign finance violation, filing false tax returns, as well as attempts to silence a witness. Charles was sentenced in 2005 to a prison term of two years. He remains active in the company. Jersey City is the first and, so far, only Trump project for the company.

About the Chinese funded NJ development, a Trump spokesperson says: “This was a highly successful license deal but he [Trump] is not a partner in the financing of the development.”

In his campaign for the Republican nomination for president Monday, Trump took a break from beating up on China, and in remarks the NYTimes.com called “unusual, if not anachronistic,” went after Japan for currency manipulation. And the band — or at least its bombastic tuba — plays on.

Private Funding for US Border Patrol

Business, , ,

To insure prompt service.

Over half of the Northeast Kingdom’s Jay Peak customers are from Canada. But border crossings are troublesome and Jay Peak owner Bill Stenger is willing pay for quicker crossings for his customers. To that end a new pilot program will allow private companies to provide supplemental private funding for  personel and customs terminals at the border. Facilities at the Miami airport, and areas of the US/ Mexican border in Texas and Northern Vermont are pilot areas for “alternative private supplemental funding.”

The money could be used to cover salaries of additional staff, overtime and services such as inspections. Customs and Border Protection is reviewing submissions from more than a dozen places around the country and expects to choose five ports of entry this summer.

 

Stenger is reported to be willing to pay an estimated cost of $1,000.00 per day but not for “long-term”. He says he has a “good relationship” with border officials, is sympathetic to their budget constraints and willing to “buck up and help pay for it”.

“On the one hand I don’t think we should have to pay for this extra care, but I’m willing to do it because it just means so much to us,” said Bill Stenger,[…] “I cannot afford to have our guests unnecessarily delayed at the border.”[emphasis added]

The NEK’s Bigfoot businessman Stenger has extensive business interests in NEK development that involve international trade. Currently, along with Jay Peak partner Ariel Quiros he is developing an aircraft manufacturing facility at the Vermont state owned airport in Newport. In April it was reported this manufacturing business will import fuselage components from Russia and around the world. The existing runway will be expanded by 1,000 ft. to accommodate private jets pending FAA approval.

The plane manufacturing company also builds float planes, said Quiros’ partner Bill Stenger of Newport City, who is working on a waterfront hotel and conference center project.

Stenger said he has talked with U.S. border officials about creating a port of entry for float planes on international Lake Memphremagog so they could tie up at the hotel.

Should be no problems there: after all, some of the Border Patrol/Customs/Immigration staff at the crossing will already be on Stenger’s payroll.

AnC Bio Vermont – Sports and Entertainment

Business, , , ,

Jay Peak has developed a new hotel and  Disney-esque water park, financed largely with private funding through the Federal EB-5 program. Much more is promised for the next phase. A jaw-dropping six hundred million dollars of EB-5 fueled foreign investment may transform the area: more lodges, hotels, condos and a new state-of-the-art hi-tech bio-tech medical factory are planned, which will, of course, bring jobs. The project is likely to produce change fast and furious enough to stir fears of its overall impact on the community.

The proposal by AnC Bio Vermont chairman Ariel Quiros stands out among the hotels and condos. Land and buildings for the hi-tech medical facility have been purchased, and reports say they will invest $110 million dollars; when completed the factory will generate “in excess” of 3,000 direct and indirect EB-5 jobs.

In support of the project a couple slickly produced promo videos, one featuring Governor Shumlin and Senator Leahy, can be seen online. Some PR releases can be found too, and one from 2011 mentions a new AnC Bio facility in China.

According to a 2011 business report AnC Bio of South Korea …

owns a state-of-the-art cGMP cell culturing facility for stem cell therapies including research, development, and manufacturing of biomedical devices and therapies.

In January 2011 as part of a $4 million investment, AnC Bio Holdings’ Ariel Quiros was given a seat on the board of Bioheart as part of a subscription agreement (early stages of a merger) deal between the two companies. Three months later he was removed from the Bioheart board due to AnC Bio Holdings’ failure to meet its payment obligations. AnCBio had made only one payment of $400,000 of the agreed installments.The tsunami that struck Japan that year was blamed.

Incidentally, AnC Bio’s Vermont chairman also owns G.S.I., a clothing and consumer electronics importing firm based in Dade County, Florida.

Since an actual “brick and mortar” bio=tech manufacturing facility is planned for Vermont, I was hoping to find an old-fashioned image of a sleek AnC-owned factory with manicured lawn and company sign pictured online, but there is none. Yet AnCBio.com is still interesting. At the R & D Center you can click any of the three categories – Cell Therapy, Artificial Organs, and Digital Researches – and you will find that the pages linked to are blank, apparently labeled In preparation for the Vermont project. The latest information in the News Release area is from April 2008. With the ongoing PR push here in Vermont it looks like either bad planning or ineptitude to not keep this section current.

[But wait, there’s more!]

Much of AnC Bio Vermont’s hopes hinge not only on the federal EB-5 program-supplied funding but on the FDA granting approval for its artificial heart device used in surgery. Aha! Well now this is what makes the next category on AnCBio.com interesting.

In the about us section under intellectual property are found seventeen medical process and device patent application notices. Who needs “ brick and mortar” if AnC bio holds useful issued patents and procedures? This “intellectual property” is where the investment value may reside.

The list of intellectual property consists of seventeen items dated from 2001 to 2007. One is listed as issued in three countries; Republic of S. Korea, USA, and Singapore. Okay, maybe this website just hasn’t been fluffed, dusted, or updated lately, which probably isn’t unusual; surely more detailed reports must be available elsewhere.

Company history could be considered as a measure in terms of future performance. AnC Bio was once called The Sports Seoul 21 Company Ltd., and is located at 10th Floor, H&S Tower 119-2 Nonhyun-Dong, Gangnam-Gu, Seoul, Korea. It has been there since 2009 when Ariel Quiros (now chairman of AnC Bio Vermont) arrived at the ten-year-old Sports Seoul 21 Ltd., along with the new name.

Business profiles done at the time of the name change and some recent profiles online describe AnCBio like this:

Company overview

The company publishes and prints daily sports newspapers which contain news contents covering various sports including baseball, football, golf and basketball as well as entertainment news. It also offers both printed and online content, and provides links to community-specific information sources for shopping, travel and real estate on its Website. In addition, the company is involved in sports and entertainment related event businesses in South Korea. […] Sports Seoul 21 LTD was incorporated in December 1999.

Dozens of foreign investors are still needed to plunk down their $500,000 green card investment [fee] to kickstart construction of AnC Bio’s Northeast Kingdom medical manufacturing plant. Once the plant is completed and operating in the US, AnC hopes to leverage that fact to speed  FDA approval of their artificial heart device.

So, a foreign-based firm that was mostly involved in clothing, consumer electronics, and “sports information” suddenly plans a major factory in a low-income area in hopes of getting federal approval of its apparently not-yet-patented-in-the-US surgical devices. As an investment for EB-5 folks looking for some return beyond their green cards, this sounds more like two-thirds of The Music Man’s seventy-six trombones plus one third Dr. Frankenstein.

Or just maybe it is fast-track EB-5 boosterism. When speaking to a Vermont newspaper about AnC’s bold plans Ariel Quiros said, the company [AnC bio] will “write new history,” , and also noted “They called me a mad scientist, but what the world sees as a risk, I continue to pursue it, and pursue it and pursue it.

Watch out NEK – and Vermont! Make sure you’re not selling the family cow for magic beans, only to run into a mean and hungry giant.