Image of Jay Peak Resort
Jay Peak Resort; Image By Lisa Rathke,

After being accused of fraud by the U.S. Securities and Exchange Commission, the owner and president of Jay Peak ski resort has finally agreed to a $150 million settlement with Raymond James Financial Inc. However, the agreement is still pending approval.

But what happened to warrant such a settlement? Why was the resort accused of fraud? It all started a year ago when the “resort’s owner, Ariel Quiros, of Miami, and former president Bill Stenger were accused of misusing $200 million raised from foreign investors through the federal EB-5 visa program.” The EB-5 visa program grants “permanent U.S. residency for those who finance projects that create a certain amount of jobs.” Some of the allegations against James, in particular, included that an “employee, at the direction of Quiros, inappropriately transferred investment funds to buy Jay Peak, failed to adequately supervise its employees and did not follow its own supervisory procedures,” according to Republican Gov. Phil Scott.

If approved, the settlement funds, according to Scott, will be used to “pay all 42 contractors, 513 trade creditors — which are the other unpaid businesses, nonprofits and municipalities — and 169 investors.”

In fact, according to Federal receiver Michael Goldberg, of Miami, the settlement will be divided as follows:

  • $67 million will go to investors in the biomedical research facility that was never built. Goldberg said, “they were really probably the biggest victims of the fraud from the investor standpoint. They did not get their green card, and they didn’t get their money, it was stolen.”
  • $19.7 million will go to additional construction at the Stateside Hotel. Goldberg said, “the hotel and cottages will be finished, a recreation center built and soccer and lacrosse fields added to help fill rooms in the summer.”
  • $5.1 million will go to trade vendors.

As for how James has responded to the settlement, well, he has yet to admit any wrongdoing. However, executive vice president and general counsel Jonathan Santelli said, “we believe this resolution is fair and representative of our commitment to redressing the victims’ losses in this case.”

Image of Gov. Phil Scott announcing settlement
Gov. Phil Scott Announcing Settlement; Image by Glenn Russell,

Others, like Goldberg, praised the company, saying “they stepped up to the plate, they faced their responsibility and they basically set an example of how firms caught in this situation should react and that can’t go unnoticed.”

Scott even chimed in, saying, “while this does not wipe the slate clean for the individuals, businesses, and communities harmed by this alleged fraud, it’s very, very encouraging news.”


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