In a notice dated August 14, U.S. Citizenship and Immigration Services slammed the state for failing to adequately monitor eight Northeast Kingdom development projects financed through the federal EB-5 program, which provides visas in exchange for foreign investment. Federal and state regulators have accused the developers behind the projects of engaging in a massive fraud scheme.
“It appears that the Regional Center failed to properly engage in management, monitoring and oversight for many years, as required by the Program,” USCIS wrote in its notice of intent to terminate the state-run center.
The Scott administration, which received the letter last Friday, released it to the media late Monday afternoon. At the same time, the governor announced that he had already decided, earlier this month, to phase out the program — a decision he had originally planned to disclose later this week.
While the Scott administration said it agreed that the state should get out of the business of regulating EB-5 projects, it plans to fight the federal order to immediately shut down Vermont’s regional center. It will instead argue that the center should stop considering new projects and gradually wind down its oversight of existing ones, according to Mike Schirling, secretary of the state Agency of Commerce and Community Development.
Schirling said Monday that the administration had concluded in its review that the EB-5 program had grown too complex for a state agency to manage.
Vermont has run its own EB-5 regional center since 1997, overseeing a federal program that allows foreigners to earn a green card by investing at least $500,000 in qualified development projects. Most EB-5 centers around the country are operated by private entities. Schirling and Pieciak said they believe EB-5 investments will continue in Vermont but through the more common privately run EB-5 centers.
In 2016, the U.S. Securities and Exchange Commission filed a civil lawsuit against Jay Peak Resort owner Ariel Quiros and president Bill Stenger, alleging that they misused $200 million in investment money over eight years for projects in Jay, Newport and Burke. The SEC later settled with Stenger. USCIS, in its notice to Vermont, said the state-run EB-5 center failed to adequately regulate the Jay Peak projects.
“Evidence in the record indicates that the Regional Center’s failure to provide adequate oversight and monitoring of its projects allowed the alleged malfeasance by Quiros and Stenger to occur,” USCIS wrote.
Specifically, the federal agency alleged that former governor Peter Shumlin promoted the Northeast Kindgom projects in 2013, even after a former Jay Peak business partner had publicly raised questions about financial irregularities. USCIS also alleged that Vermont had not required Quiros and Stenger to file mandatory quarterly reports.
The state’s lack of oversight delayed job creation, left some investors without visas and forced contractors to lay off workers once the fraud was revealed, USCIS said. The Jay Peak fraud allegations also undermined unrelated projects, the federal agency said, including a plan to expand the Morrisville-Stowe State Airport.
Pieciak said Monday that ACCD lacked the resources and the authority to properly manage the high-level financial dealings. For example, he said, ACCD didn’t have the power to subpoena Quiros’ and Stenger’s financial records when the developers refused to provide them. DFR has that authority, and subsequently did subpoena information, he noted.
In their report, Pieciak and Schirling wrote that developers’ legitimate need for privacy on proprietary matters also runs counter to public records requirements that apply to state government.
Schirling and Pieciak said Monday that they will respond to the federal agency by arguing that Vermont’s EB-5 center should be phased out instead of shut down immediately. That process could take 10 years, they said.
Pieciak said immediate closure would leave some 350 foreign investors who have not yet obtained visas at risk of having to start their applications over with other projects and would leave developers at risk of losing those investors’ money.
The state, Schirling and Pieciak wrote in their report, “should not ‘throw out the baby with the bath water.’”
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Certainly criminal laws were broken so why no accountability in the Courts for Quiros and Stenger other than Civil cases and attempting to payback those that were fleeced?
Also no public accountability or censure for those on the State of Vermont’s side that were supposed to be the watchdog against exactly what happened. I guess the State Employees get the benefit of hiding behind the old ‘personnel matter’ shield that gets used so often here in Vermont that The People will never know if it was collusion, malfeasance, or just outright incompetence that allowed these funds to be misappropriated right under their noses.
Will Criminal charges ever be brought against anyone ?
I still would like to know why is a American citizenship is up for sale, If these foreigners want to become citizens then damn it do it the way good honest foreigners do it, apply for citizenship, not buy it..Ariel Quiros
is still running around free and president Bill Stenger got away with it.. they both committed fraud..I remember reading where Stenger saying he didn’t know anything about this..He was the president of the damn thing how can you not know about this..It’s say anything, pass the buck, to “Cover you BUTT” the are both crooks. This EB-5 crap should be done with. Stop selling U.S. Citizenships.!!!..
And what happens to state employees who were at best incompetent and at worst fraudulent? They move on to bigger and better jobs. Pat Moulton was named president of Vermont Technical College. Runner up was a dean at a technical college with relevant experience. The Vermont way!
“Evidence in the record indicates that the Regional Centers failure to provide adequate oversight and monitoring of its projects allowed the alleged malfeasance by Quiros and Stenger to occur, USCIS wrote.” What in heaven’s name, is the justification for the State of Vermont to run this crime factory even one day longer? Answer: None. Shut it down asap. On a separate note, I also agree that U.S. citizenship should not be for sale. That the liberals do not see the absurdity of illegals being in our country and in the case of Vermont, given very generous benefits as juxtaposed with selling citizenship to elites is, well, it’s absurd.
@Donna Boutin, you are making good point but this is legal way to gain US citizenship. Current federal immigration law allows it. It is similar to what some other nations do to bring in financial investment. Australia has similar program and many wealthy Asians/Chinese have essentially bought citizenship in Australia. Certainly this project was a problem but in looking at big picture, isn’t it better to have immigrants who are financially able to take care of themselves and their families?
Congress would have to revise US immigration law to eliminate this. Cotton-Perdue RAISE Act just introduced in US Senate would move US to points system similar to Canada and Australia. People would gain points based on multiple factors, i.e., education-level; skills level; English-language level; etc. This is another way to have an immigration system that makes it more likely immigrants will be self-sustaining from the get-go.
RAISE Act almost exactly mirrors the recommendations and conclusions of President Bill Clinton’s Bipartisan Commission on Immigration Reform, led by African-American Democratic Congresswoman Barbara Jordan. It is a sensible proposal. I am surprised the Democrats have not embraced it given how similar it is to the prior suggestions of President Clinton and Ms. Jordan. This would be the perfect opportunity for both sides to stop playing politics and for a compromise where the Democrats embrace the RAISE Act in exchange for Trump’s endorsement of the Dreamer Act for the 800,000 plus illegal alien children who have stayed in school & do not have additional crimes (beyond the initial immigration crime perpetrated by their parents).
Historian Jon Meacham recently stated on Bill Maher Show: “It is not racism to debate immigration.” Fareed Zakaria, who supported Hillary Clinton, said the Democrats have to give up their “absolutism” on immigration. Hope they will for sake of party & the nation.
According to Schirling and Pieciak “Vermonts EB-5 center should be phased out instead of shut down immediately. That process could take 10 years, they said.The state, Schirling and Pieciak wrote in their report, should not throw out the baby with the bath water.”
!0 years ? The want 10 years to close down this nest of incompetence and failure ?
Just think how much negligentce and bad decisions they can make in this time
How about closing them down in 10 days !
This is one of the many reasons I left Vermont years ago after making Montpelier my home for 35 years, owning two homes and rental property, and running a successful business. I saw this happening to the state a long time ago but the lost left was stuck back in the hippy world of 1968 and was not only ignorant of it but could not even converse about it, and I always did consider myself to the left yet was attacked by who I thought were my “tribe” for even bringing it all up and daring to criticize the progressive sacred cow, Bernie Sanders. And I am sorry to say now that I voted for him. But this has all changed for me as I educated myself. Starting at the end of the 90’s and through the housing boom my personal home taxes rose 300%, and in the census decade from 2000 through 2009 the number of millionaires in Vermont increased by 500%. Two-thirds of my mini-van/used Volvo driving middle-class family neighborhood sold their homes as taxes rose and left Montpelier or even the state like myself within a five year period in the early 2000’s, and were all replaced by wealthy BMW/Hummer driving families to whom writing $350,000 checks for a house was like a shopping trip to the grocer. Vermont became like a cut-out cartoon parody of itself. Sad. It has joined the great Northeast state corruption rackets and Leahy and the great “socialist” Bernie Sanders who is now worth into the millions are right in the middle of it all.