Q Burke disaster



  • Vermont reaches $5.9M settlement in ski resort probe                       


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    Posted: Thursday, June 30, 2016 3:46 pm

    Vermont reaches $5.9M settlement in ski resort probe Associated Press |

    MONTPELIER, Vt. (AP) — Vermont financial regulators said Thursday they have reached a $5.95 million settlement with a financial firm related to the fraud investigation of real estate developments at two northern Vermont ski resorts.

    The Department of Financial Regulation said it found Raymond James and Associates' Miami branch failed to comply numerous times with supervisory requirements and Vermont law.


    The department specifically cited Miami businessman Ariel Quiros, owner of Burke Mountain and Jay Peak ski resorts, and Bill Stenger, Jay Peak's president, and their use of accounts at Raymond James to transfer funds among investors, limited partnerships and other entities.

    Quiros and Stenger are accused by Vermont and the Securities and Exchange Commission of misusing about $200 million from foreign investors through a special visa program. The EB-5 program allows permanent U.S. residency for those who finance projects that create a certain amount of jobs.

    Both men have said they'll be cleared of any wrongdoing.

    Raymond James said in a statement it was pleased a settlement has been reached.

    The department said that under the settlement agreement, $4.5 million will go to the federal receiver overseeing the resorts and projects to reimburse possible claims by investors. Another $1.25 million will go to Vermont's general fund as an administrative penalty and $200,000 will be paid to state financial regulation for the investigation, the department said.

    "Since the SEC's seizure of the Jay Peak-related EB-5 projects, investors have been rightly concerned about possible recovery of funds. This settlement contributes to their restitution," department commissioner Susan Donegan said.

  • The only time the banker goes to jail is when he lands on the wrong space in a Monopoly game

  • edited July 2016
    The SEC appointed receiver is suing Raymond James & there are also a couple of class action lawsuits by investors pending. They're not out of the woods yet.

    They were also recently fined $17m for not doing enough to prevent money laundering.
  • Jay, Burke Resorts to be Sold Separately

    Jess Aloe, Free Press Staff Writer 1:09 p.m. EDT July 20, 2016

    Jay Peak and Burke Mountain will be sold separately, according to receiver Michael Goldberg.

    A federal court in Miami seized control of both resorts in April after the Securities and Exchange Commission filed a complaint accusing owner Ariel Quiros and CEO Bill Stenger of perpetuating massive fraud related to the EB-5 program. Goldberg was appointed to oversee the operations of the resorts by the court.

    Under the EB-5 program, foreign nationals can invest $500,000 into a project in an economically depressed area in exchange for a conditional green card. If the investment generates enough jobs, the conditions for the visa can be lifted. The SEC has accused Quiros of misappropriating funds for his personal use and accused both Quiros and Stenger of using money raised for one project for a different project.

    Burke Mountain is the higher priority sale, Goldberg said on Tuesday, though both resorts will eventually be sold. The subcontractors who built the resort are owed millions of dollars and, as Quiros' assets have been frozen, may not be paid until the resort has changed hands.

    "I am working on other ways to attempt to get the contractors paid," Goldberg wrote in an email to the Burlington Free Press, although he declined to elaborate at this time.

    Goldberg said that he and his team have not focused on the sale of Jay Peak yet and he is unsure of the total value of the resort. He said the resort will most likely be sold as a package at the right time, though not if he can get a higher price selling it in parts.

    "We've been told that the current court proceedings underway most likely will take some time to reach a resolution," JJ Toland, the communications director for Jay Peak, said. "If Jay Peak were to be sold, we've been told it would be to a company that has extensive experience in running a resort such as ours."

    Both Jay and Burke are currently being run by the Leisure Hotels and Resorts, a hospitality management group with experience managing properties in receivership. In the court filing requesting approval of Leisure Hotels and Resorts, a lawyer from Goldberg's firm wrote that the group is "one of the preeminent resort management companies in the country."

    Parker Riehle, president of the Vermont Ski Areas, said he's been wondering about who will buy Burke and Jay. He said both resorts are remarkable, though he hasn't heard any rumors of potential buyers.

    "All I do know is this process could take a while," Riehle said, based on conversations he's had with Leisure Hotels and Management.

    Both resorts offer a lot to potential buyers, he said. Jay has the water park and the ice arena, among other new assets. He said he had recently seen the hotel at Burke, which plans to open this fall.

    "I was just floored, it's incredible," he said.

    Riehle said he wouldn't be surprised if offers for the resorts already existed, though he said he didn't expect the receiver to take the first offer on the table.

    There are few cases in history that provide some insight into what's ahead for Jay and Burke, but Riehle said the woes of Les Otten, the owner of the American Skiing Company that went bust in 2007, could provide an example of resorts that went through tough times and flourished.

    Otten began buying resorts in 1980, but by the 2000s investors began to believe he had overleveraged the many resorts he owned. He owned, among other resorts, Killington, Sugarbush and Mount Snow in Vermont.

    Mount Snow and Killington were bought by multistate mountain conglomerates, Missouri-based Peak Resorts and Utah-based Powdr. Both, Riehle said, have been enormously successful. Win Smith, the former Merrill Lynch executive and current chairman of the Vermont Business Roundtable, was the lead in a group of investors who bought Sugarbush in 2001.

    If Jay and Burke are bought by groups that operate multiple mountains, it's likely they could be added on to multi-mountain passes.

    "These things are big time sales leaders," Riehle said, since they allow skiers and snowboarders to visit more than one resort without having to purchase day tickets. Multi-mountain passes are a big draw in an era where the snow industry is focused on the challenge of keeping millennials on the snow.

    "We have to engage and convert two millennials for every baby boomer who leaves," Riehle said, since millennials have less free time and spend less money.

    Some watchers have said the ski industry is in trouble. According to data from the National Ski Areas Association, there were 470 ski areas in operation in 2014-15, down from 546 in 1991. In Vermont, a warm winter and a lack of snow led to one of the state's worst ski seasons.

    But while the receiver and courts may be looking at the long-term future, Jay Peak and Burke Mountain are focused day-to-day operations.

    Burke is focused on making sure their mountain bike park and hotel are ready for their opening on Sept.1, said Jessica Sechler, Burke's marketing manager.

    Toland, Jay Peak's director of communications, said customers should expect business as usual at the resort this winter. Season pass sales are about the same as they were this time last year, and sales of ski and ride lodging packages, including packages over holiday periods like Christmas, are up nearly 10 percent.

    "Add in the fact that we're expanding our snowmaking coverage and we're looking at a very promising winter," he said.

    - Sam
  • edited September 2016

    Hmmm Mr. Stenger is still getting $100,000 a year salary, Jay Condo and car expenses. So don't be surprised if you see him around this season.

    Edit 9/4: I'm a day late and a dollar short again. I guess you won't be seeing Bill around.

    ISNE-I Skied New England | NESAP-the New England Ski Area Project | SOSA-Saving Our Ski Areas - Location SW of Boston MA
  • "Making ski films is being irresponsible with other people's money, in a responsible sort of way..." 
    Greg Stump
  • edited September 2016
    Stenger turning on Quiros was predicted by a few people here (not me, although I figured it was possible)

  • "Making ski films is being irresponsible with other people's money, in a responsible sort of way..." 
    Greg Stump
  • The comment after that VPR story speaks volumes:

    Again, if someone like you or me walks into a gas station and takes $200 out of the cash register, we get a felony conviction, we're sent to jail, we are denied the right to vote, and finding future employment has become a LOT more difficult so that when we do get released, we're 90% more likely to commit another crime. When a wealthy investor steals $200 million from investors, he gets to walk away just as long as he can pay some of it back and agrees to never work on this type of investment again...

    Yes, I understand that Bill Stenger is a likable guy and he's done some good things for the Northeast Kingdom. But that doesn't change the fact that he committed a crime and likely did terrible harm to those who trusted him. $200 million is a LOT of money, not to mention the enormous expense the state just went through to sort out all this mess in Court. Now Mr. Stenger gets to walk away without "admitting to any wrongdoing" (translation - anybody who wants to sue him for ruining their lives will have to start a new lawsuit at their own expense), the "big hole" in the middle of Newtown won't be going anywhere, and the status of the EB-5 investors remains unresolved.

    I'm sorry, this doesn't sound like Justice to me. To me, it's just another example of our two-tiered injustice system

  • This isn't anything about justice.  This is a civil case.  They have yet to file a criminal complaint.  

    But you're forgetting one important tidbit:  Stenger is testifying against Quiros.
  • obienick said:

     They have yet to file a criminal complaint.  


  • There's a substantially higher burden of proof for a criminal complaint (beyond a reasonable doubt ... aka 12/12 jurors) vs. a civil complaint (preponderance of the evidence ... aka 7/12 jurors).  I've heard a criminal complaint is in the works.  Supposedly the SEC always does these suits first to stop the fraud and gain control ASAP.
  • ropeways.net | Home | 2016-09-13


    (East Burke, VT): Burke Mountain Resort cut the ribbon on the first hotel to ever open on its slopes. 

    The Burke Mountain Hotel & Conference Center debuted with limited operations last month with two soft opening weekends as staff prepared the $55 million facility for seven-days-a-week operations. Today’s formal ceremony, attended by Governor Peter Shumlin along with several of his commissioners, local officials, community members, and resort staff, celebrated the hotel’s official opening for daily operations.

    “We knew this was a missing piece to the success of this resort,” said Steve Olson, Chief Executive Officer of Leisure Hotel and Resorts, the management firm appointed to operate Burke Mountain on April 12 when the Securities and Exchange Commission placed the resort in federal receivership.  “We were amazed how finished the project was when we began managing the resort, but understood the timing of the opening would play a big role in reservations. Fall is not only big for foliage travelers, but also biking, hiking, weddings, and conferences as we are already seeing by the amount of rooms being booked.”

    That point was proven this past weekend when Burke Mountain Resort saw record-breaking (non-ski) revenue numbers and sold every available room in the Hotel Saturday evening over the Labor Day holiday weekend.   Over 140 people were toured Saturday afternoon during the community celebration and the feedback surrounding the weekend was positive.

    The 116-suite hotel is located just below the MidBurke Express quad and can accommodate over 450 guests a day. The new facility also features a day lodge complete with a restaurant, pub, coffee shop, retail store, and an arcade.

    “To see all of this come together feels so good” shares Jessica Sechler, Director of Marketing at Burke Mountain.  “Some of the staff including myself remember walking around this building in hard hats and orange vests visualizing what this building will become.  Now that we are open and seeing the results of all of our hard work payoff is something we’ll remember for a long time”.  

    With the Hotel now open daily, Burke Mountain has seen a steady increase in reservations over the next two months with some of its first ski & stay packages on the books.  Employment applications have also increased as more jobs become available. 

  • edited April 2017
    Raymond James agrees to pay an additional $145.5M to settle their portion of the suit to pay contractors and to refund investors.  Previously paid $4.5M to VT to settle State liability.

  • I wonder if Vail or Aspen have any money left to snatch up Jay.
  • I think there's a lot more to go with this. Mont Saint Sauveur has been added to the investors' suit as they allegedly knew Q was planning on using the escrow money to buy the place and failed to do due diligence to see if Q really had independent funds. Stenger has made a deal with the State and fed civil suit, but Q is still liable and just fired his lawyer. Both still face criminal charges.
  • This will be tied up in litigation for a very long time. I doubt they will have any serious buyers until things are settled and Q is behind bars. Too much baggage.
  • I cut the EB-5 stuff (paragraphs here and there) out of the
    long article to get it to fit 2.0 I’m amazed that they made so much. As
    suggested, skiers were more interested in terrain than EB-5 woes.



    30, 2017, 5:50 PM BY ALAN J. KEAYS 4 COMMENTS


    Jay Peak Resort is reporting
    a big bounce-back year, buoyed by increased snowfall and the shedding of costs
    associated with operating an EB-5 immigrant investment program that led to fraud
    charges against the past operators.

    difficult to make a comparison to the preceding fiscal year because of the
    state of the financial books when the property was placed in receivership amid
    fraud allegations against owner Ariel Quiros, say officials now running the

    they estimate that profits quadrupled in the fiscal year just ending, compared
    with the previous one, from $1.8 million to more than $9 million.

    estimated that revenue at Jay Peak rose from about $35 million to more than $50
    million, with books expected to close on the resort’s fiscal year at the end of

    credited everyone from resort staff and leaders to officials with the
    receivership with helping to create the turnaround, terming it a “team effort.”

    resort reported receiving 491 inches of snowfall this ski season, double the 206
    inches from the previous one.

    season snow help a lot,” said Steven Wright, Jay Peak’s general manager. “We
    were all expecting a slow start due to the receivership, people not wanting to
    commit money to us because of the status.”

    skiers seemed more interested in terrain conditions than EB-5 turmoil.

    people who come here are a different breed,” Wright said. “We asked folks to
    stick with us and they did.”

    the cash flow woes, the aerial tram was in need of $4.9 million in repairs. A
    fix made last year allowed it to open for this ski season, with more work now
    underway. The tram closed in early April for those repairs and is expected to
    reopen in June.

    At Burke,
    the resort is projected to lose a little under $2 million this season, though
    Olson said that facility operates on a different fiscal year than Jay Peak.
    Burke’s year runs from Oct. 1 to Sept. 30, while Jay runs May 1 to April 30.

    Goldberg and Olson said the expected loss is less than what was projected,
    which had been estimated at more than $4 million after the takeover.

    At that
    time, financial controls were found to be lacking and senior management was
    dismissed, The resort’s operation was reorganized, with some office functions,
    such as accounting, consolidated at Jay Peak.

    factors should also bring more people to the mountain, Goldberg said, including
    a new ski lift going in this summer, improved relations with Burke Mountain
    Academy, an elite ski school, and the resort’s designation in December as a
    training site for the U.S. Ski Team, Goldberg said.

    increased snowfall this season, coupled with investments in snowmaking, helped
    boost the resort’s bottom line, providing an extended ski season that ended in
    early April.


  • And Bill Stenger is being paid $50/hour to help consult the installation of the new T Bar.
  • You ski because even if you don't do it well, it's still a blast....
  • can't open- paywall
  • here's copy & paste & repaste here (to eliminate massive formatting)

    An investor in the Jay Peak development project that federal officials allege was really a massive Ponzi scheme has sued the state of Vermont, claiming officials knew about the fraud but covered it up.

    Antony Sutton, who lives in suburban London, is seeking an unspecified amount of restitution and damages from the Vermont Regional EB-5 Center, the Agency of Commerce and Community Development, the Department of Financial Regulation and a number of current and former state officials, according to a copy of the 85-page lawsuit his lawyers provided Wednesday to the Burlington Free Press.

    The lawsuit, filed late last month in Vermont Superior Court in Hyde Park by Stowe lawyers Barr Law Group, says the Vermont Regional Center and Jay Peak essentially were "partners in the largest fraud in Vermont history and the largest EB-5 fraud in U.S. history."

    The state ignored and then retaliated against whistleblowers "to silence the revelations of fraud," the complaint alleges, and then conspired to protect itself as the scheme unraveled.

    State officials say they have yet to receive a formal copy of the complaint and will reply in court.

    The federal Securities and Exchange Commission, along with Vermont authorities, alleged in 2016 that Miami businessman Ariel Quiros and his Vermont partner, former resort President and CEO Bill Stenger, orchestrated a "Ponzi-like" scheme of fraud starting when Quiros purchased Jay Peak Resort in 2008.

    Investors contributed hundreds of millions of dollars for seven projects in the towns of East Burke, Jay and Newport through the federal EB-5 visa program, which offers a path to permanent residency for foreign nationals who contribute at least $500,000 to projects that create jobs in rural or economically depressed regions.

    Quiros and Stenger were accused in a civil complaint of misappropriating $200 million raised from the foreign investors. The government also alleges Quiros diverted $50 million for personal use. He denies wrongdoing.

    Stenger settled his case with the SEC. The allegations were civil rather than criminal, but federal prosecutors in Vermont have said a criminal probe is ongoing.

    Sutton's lawsuit alleges that, rather than being the watchdogs of the project that they were expected to be, various state agencies and employees acted instead as conspirators.

    "The VRC Team took an active role in the Ponzi-scheme out of self-interest, self-preservation, personal gain, and protection of their Jay Peak partners," the lawsuit states, referring to the Vermont Regional Center.

    "The VRC Team's true motivations and role within the Jay Peak fraud are evidenced by years of ignoring investor complaints, as well as attacking and attempting to discredit those who raised issue with the wrongdoing at the Jay Peak Projects and within the VRC."

    The complaint has yet to be served on state officials, but they received a copy of the lawsuit from a reporter, Mike Schirling, secretary of the Agency of Commerce and Community Development, said in a statement.

    RELATED: Vermont reverses course on concealing lawsuits

    "We will review and respond to the complaint if and when it is formally received," said Schirling, who became secretary under first-term Gov. Phil Scott earlier this year.

    The allegations surrounding Jay Peak, and the state's oversight of the project, involve conduct under the administrations of the previous two governors, Peter Shumlin and Jim Douglas.

    "We continue to support the projects in the VT Regional Center and, with regard to Jay Peak, are working closely with the Federal Receiver, Michael Goldberg, to ensure the best possible outcomes for investors and impacted parties," Schirling continued. "Unfortunately, we cannot comment in greater depth on a matter anticipated to be in litigation."

    Sutton is asking the court to allow his lawsuit to proceed as a class action involving other investors who lost money in the Jay Peak projects. The lawsuit demands a jury trial, court costs and attorney fees in addition to compensatory and punitive damages.

  • Well if you can't turn a profit during a winter like last winter (for VT, esp north) you will not survive.
  • Quiros Surrenders Jay Peak in Burke in SEC Settlement

    As part of the settlement, former CEO Bill Stenger will pay a $75,000 fine.

    Friday, February 2, 2018, NewEnglandSkiIndustry.com

    In a Plaintiff’s Unopposed Motion For Entry Of Final Judgments released today, former Jay Peak and Burke Mountain owners Ariel Quiros and Bill Stenger have reached a civil settlement with the United States Securities and Exchange Commission, "without admitting or denying the allegations." The settlement does not preclude the two from being criminally charged at a later date.

    Under the terms of the settlement, Ariel Quiros will surrender ownership of Jay Peak and Burke Mountain ski areas, amongst many other properties. In addition, Quiros agrees to pay a $1 million fine, while former CEO Bill Stenger agrees to pay a $75,000 fine.

    The funds generated are to be allocated to defrauded Jay Peak EB-5 investors, as well as lawyers associated with the case.

    Both Quiros and Stenger are barred from future EB-5 offerings, a stipulation that appears to be loosely defined based upon Stenger's recent involvement in a T-Bar project at Burke using EB-5 funds. In addition, Quiros is barred from "serving as an officer or director of a public company."

    Stenger has one year to pay his $75,000 fine.

    Quiros will see his personal asset freeze lifted upon paying his fine, surrendering his properties, and signing over funds in 10 bank accounts. In addition to the ski areas, Quiros' properties include real estate in Vermont and two condominiums in New York.

    The total value of the property and funds Quiros will transfer is $83,859,964.


    Patrick Leahy and Bill Stenger
    Stenger, a political science major at Syracuse University, started working at at Jay Peak in 1985 and in 2008 recruited Ariel Quiros to purchase the resort from Mont Saint Sauveur International. Following the acquisition, the group's EB-5 immigrant investor proposals expanded throughout the Northeast Kingdom with a planned price tag of $500 million. Meanwhile, Stenger and Quiros started a massive campaign of contributing to politicians, paying for their international junkets, and arranging press conferences and committee appearances to boost investor interest.

    A Federal program created by Senator Ted Kennedy and championed by Senator Patrick Leahy, EB-5 allows immigrants to obtain a green card in exchange for investing $500,000 in a government endorsed business that creates ten jobs. In the case of the Jay Peak program, 20% to 25% of the investment was taken by developers and agents as fees.

    The SEC took control of the properties on April 13, 2016, alleging that Quiros and Stenger were running a Ponzi scheme that was defrauding investors. The businesses were placed in receivership under Michael I. Goldberg, with Leisure Hotels and Resorts of Kansas City appointed to run the resorts.

    A cornerstone of the SEC's lawsuit is the allegation that margin loans were taken out with EB-5 funds as collateral, a strategy that Quiros described in detail. Quiros and banker Joel Burstein both stated that Stenger participated in margin loan conversations.

    The resorts remain under control of the government appointed receiver.

    - Sam
  • Yeah, so all of those foreign investors get hosed, right? They should ship his Q butt to a country where most of those investors are from and let him face their justice system and go from there. He conned the Kingdom and now they pay the price. 

    Or, as punishment, let him fill in the hole in downtown Newport by hand with a shovel and a wheelbarrow. 
    "Making ski films is being irresponsible with other people's money, in a responsible sort of way..." 
    Greg Stump

  • Jay Peak and
    Burke Mountain For Sale in May

    re to More

    SAM Magazine—Jay, Vt., Feb. 16, 2018—The official opening of Jay
    Peak’s Clips & Reels, a $5 million indoor movie theater, climbing wall and
    arcade center, marks theend of nearly a decade of major development at the
    resort—and the beginning of the process to sell the property, along with sister
    resort Burke Mountain.

    Since going into receivership in April of 2016 after its former
    owner was accused of defrauding millions of dollars in foreign investor money,
    court-appointed receiver Michael Goldberg has made it clear he intends to make
    sure the properties maintain value when they eventually hit the market.

    The recent settlement reached between the Securities and Exchange
    Commission and Ariel Quiros, the former owner, and Bill Stenger, the former
    CEO, has cleared the titles for the hotel at Burke, and the hotels, condos,
    waterpark, and other amenities built at Jay. As a result, it clears the way for
    the sale of the two resorts. Goldberg plans to market the properties together,
    and expects them to sell before next ski season. No price has been published.

    A report by vtdigger.com said this will greatly benefit the
    foreign investors, who got involved with the projects at Jay and Burke by
    participating in the EB-5 Program. The investors’ original contracts gave them
    an interest in partnerships of the projects, but not of the mountains
    themselves. Now, the investors own Jay Peak and Burke mountains, including the
    ski operations. When the resorts sell, they could recoup millions of dollars
    more than what was originally worked out.

    Read the full report on vtdigger.org

  • Receiver: Buyers interested in ski resort properties

    Originally published
    February 16, 2018 at 9:59 am


    The Associated Press

    MONTPELIER, Vt. (AP) — A federally appointed receiver says
    there’s “plenty of interest” in a Vermont ski area rocked by investment fraud.

    The Caledonian-Record reports receiver Michael Goldberg said
    Thursday he is beginning the process to sell Jay Peak and Burke Mountain.
    Goldberg says he’s not sure how much the resorts will sell for. The profits of
    the sales will benefit defrauded investors.

    A judge recently approved a settlement with former resort owner
    Ariel Quiros. Quiros and his business partner, William Stenger, were accused in
    2016 of misusing more than $200 million raised from foreign investors through
    the federal EB-5 visa program. The men have agreed to pay restitution and

    Jay Peak will be marketed first. Goldberg doesn’t believe either
    property will be sold before November 2018.


    Information from: The Caledonian-Record,

  • thanks for posting!  I guess we need a "who will buy" thread with over/under on Powdr, Vail, Skico/Alterra whatever it is, Peak, Boyne...or perhaps an Ester Ledecka type surprise buyer.

    Is Mr. Quiros precluded from assembling a buying group?  Recalling the spaghetti diagram, I wouldn't put it past him

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