The federal government is expected to reverse its decision to shut down Vermont’s EB-5 foreign investor program, giving hope to hundreds of investors in the fraudulent Jay Peak project that they will still be able to get the green cards they sought in return for pouring money into the ski resort.
The EB-5 program gives foreign nationals a pathway to citizenship in return for investing $500,000 in development projects in economically disadvantaged regions of the country like the Northeast Kingdom, where Jay Peak is located.
One of the biggest frauds in the history of the EB-5 program was carried out at Jay Peak by Ariel Quiros and his partner Bill Stenger. Quiros pled guilty to several federal criminal charges, admitted that he used EB-5 funds to pay personal expenses, and that he misled investors in a Ponzi-like scheme. In April 2016, a federal court appointed a receiver, Michael Goldberg, to manage Jay Peak. Goldberg plans to sell the resort to recoup a portion of investors’ money.
The scandal led the U.S. Citizenship and Immigration Services to close Vermont’s EB-5 Regional Center in the summer of 2018. Vermont was one of a few states that ran its own EB-5 program rather than leaving it to private interests.
Vermont lost its initial appeal of the decision to close the regional center, but on March 25, USCIS agreed with the state’s argument that the decision should be reversed, and reinstated the regional center. USCIS Acting Director Tracy Renaud still has to sign off on the decision.
They finally saw it our way
Michael Piaciak, commissioner of the Vermont Department of Financial Regulation, said Friday he expects Renaud to confirm the decision to reverse the closure of the state’s EB-5 center. Pieciak said he still was surprised by the decision, because USCIS had rejected Vermont’s arguments for several years.
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“They just did not seem to be sharing the same perspective we had on the case law and facts of the case,” Pieciak said. “We thought all along that our position was the most reasonable and also legally sound.”
In appealing the USCIS decision, Vermont argued that it had beefed up enforcement of the EB-5 program after Jay Peak and had gone after Quiros and Stenger with an investigation resulting in legal action. The state also argued that Vermont was continuing to see economic benefit from the EB-5 program from other non-fraudulent projects, and that even Jay Peak was thriving under the management of Michael Goldberg.
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Pieciak said once the USCIS decision is final, the investors in Jay Peak and other EB-5 projects in Vermont will be in a much better position to receive the green cards they are seeking. Previously the investors were thrust into a kind of limbo after the Vermont Regional Center was closed.
“This decision paves the way for them to retain conditional citizenship, or receive it,” Pieciak said.
Vermont will not reverse its own decision to get out of the EB-5 business, even after the USCIS decision is final, according to Pieciak.
“This is a type of economic development best kept in the private sector,” Pieciak said.
Contact Dan D’Ambrosio at 660-1841 or firstname.lastname@example.org. Follow him on Twitter @DanDambrosioVT. This coverage is only possible with support from our readers.