State regulators last month told an EB-5 developer in southern Vermont to stop marketing a ski condo project to potential immigrant investors for the time being.
The Vermont Department of Financial Regulation has directed the developers of South Face Village, located adjacent to the Okemo Mountain ski area, to update an agreement with investors and accept new state oversight measures. The developers and the state are still negotiating terms and are expected to resolve outstanding issues in the next few weeks, officials say.
The state is imposing more stringent standards on EB-5 projects in the wake of fraud allegations at Jay Peak and Burke Mountain ski resorts in the Northeast Kingdom. The Securities and Exchange Commission alleged in April that developers Bill Stenger and Ariel Quiros misused $200 million in immigrant investor funds and defrauded more than 700 investors from 74 countries in a “Ponzi-like” scheme.
Both Quiros and Stenger have denied the charges.
The fraud is alleged to have taken place in spite of the state’s particular responsibility for oversight of EB-5 projects. The Vermont EB-5 Regional Center, a division of the Agency of Commerce and Community Development, is one of two state-run regional centers in the nation. State officials were required to monitor the projects but failed to require the Jay Peak developers to submit quarterly reports. The agency also allowed Stenger and Quiros to sidestep millions of dollars in administrative fees that should have been paid to the state.
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