A development company that hoped to build high-end assisted living facilities for retirees in Vermont has lost approval from the state’s EB-5 center. The company, DreamLife Retirement Resorts, LLC, with representatives in Quebec, Ontario, Vermont and Florida, hoped to build six well-appointed, 160-apartment unit projects. The plans for the assisted living facilities include spas, salons, libraries and movie theaters. In February, the company was negotiating purchases of sites selected in Bennington, Rutland and Montpelier, documents show. DreamLife planned construction at two of the sites within the year.
In order to make this a reality, the company, doing business as EB-5 American Dream Fund I, Inc., needed to raise more than $144 million and attract more than 300 foreign investors who, under a federal program known as EB-5, receive green cards in exchange for cash investments. Nearly three years have passed since American Dream first received permission from the Vermont EB-5 Regional Center to seek foreign investors for two apartment buildings, and in the intervening period, the DreamLife developers have not purchased land or obtained options on properties, nor have they attracted a single foreign investor.
Officials with the Vermont Agency of Commerce and Community Development cancelled the agreement with American Dream on March 27 because of “material misrepresentations.” Three of the four individuals who represent the company cited themselves as attorneys for the project; none of the men identified are licensed to practice law in Florida, where the law firm cited in the agreement, USMS Team, is registered. In addition, American Dream listed a DreamLife construction team on its website that state officials determined were not notified that they had been identified as contractors for the project. Several said they did not have contracts with the company.
American Dream has 14 days to respond to the state’s notice of cancellation. Phil Mooney, the managing director of DreamLife and a former CEO and president of the nonprofit Immigration Consultants of Canada Regulatory Council, told VTDigger the company would resolve the issue with the state in a few days. As of April 3, there was no update from the company.
“We can refute and justify everything,” Mooney said. “We have 14 days to provide a remedy, and we believe we can absolutely do that. Not even in 14 days, in just one or two. We disagree completely with the letter and are busy preparing a response which will see us continue as an EB-5 project under the [Vermont] Regional Center.”
Last spring, state officials became aware that a key participant in the project recently stepped down from a leadership role in the company. Richard Parenteau, the founder of DreamLife, who state officials say is now a “background investor,” was convicted of perjury in Quebec last summer, according to court documents, after a decade-long dispute over a will. State officials say as a result of the conviction, Parenteau, a former Rock Forest (Quebec) chief of police, is no longer able to cross the border for meetings in Vermont. Parenteau has also been accused of violating labor rules in Quebec, according to court documents.
No Reinstatement LIkely
Lawrence Miller, the current secretary of the Vermont Agency of Commerce and Community Development, cancelled the agreement with American Dream in September and then reinstated the memorandum of understanding (MOU) in November after he and other state officials were assured that Mooney would lead the company and that a new escrow account had been secured. The state’s latest decision to cancel its agreement with American Dream, based on the aforementioned “material misrepresentations,” comes on the heels of accusations that the company may have violated Securities and Exchange Commission rules with regard to marketing to investors.
Agency Secretary Miller said it’s unlikely the state will reinstate the American Dream MOU. In the cancellation letter, he wrote: “Based on the nature and significance of the examples of material breach, we do not foresee American Dream Life Fund I being able to cure them or remedy the broken trust.”
State officials say the Vermont EB-5 Center, which so far has a 100 percent success rate, must maintain its stellar reputation in order to continue to attract investors.
See full VTDigger article here.