Opinion: Sanders and Leahy should be named in Vermont’s latest EB-5 Ponzi scheme lawsuit

The following article by Steve MacDonald has been republished with permission from GraniteGrok.

A group representing 121 “investors” has filed a lawsuit claiming that state officials in Vermont knew the project at a Vermont Ski Resort was a Ponzi scheme but did nothing to stop it.

If you missed it, back in early 2016 we reported on the funneling of millions of dollars, laundered through the feds, to “projects” in Newport, Vermont.

From 2014 through 2015, over $17 million was awarded by the FAA and DOT to remodel the airport serving the tiny town and the 4,600 residents. It caught our attention (see Les Otten and the Balsams Boondoggle), introducing us to Bill Stenger and Ariel Quiros.

Public domain

Sens. Bernie Sanders, I-Vt., and Patrick Leahy, D-Vt.

They used the EB-5 Visa program to get investment money for their projects from foreign investors.

A ski resort expansion (mismanaged by Jay Peak and QBurke), among others, explains the airport expansion because you can’t have a successful resort if people can’t land planes nearby to take advantage. Newport is on the Canadian border, a drive from just about everywhere.

I’m sure that’s how they sold it. That’s how Senators Sanders (I) and Leahy (D), and Congressman Welch sold it. Expansions “that will bring people for business, tourist and recreation opportunities throughout the region.”

They were very excited to announce all those funds secured for the runway and then a taxiway expansion to this local airfield.

Leahy also personally complained to a Senate Committee about delays with the EB-5 program (being used to support the Ponzi scheme).

Vermont developers have used EB-5 funding at several large, tourist-related development projects, including at Jay Peak and Burke Mountain, in Stowe and at Sugarbush, Okemo and Mount Snow. Because of a backlog in processing and increased oversight by federal regulators, including the SEC and USCIS (immigration), application approvals have slowed and projects have stalled.

If foreigners gave money (500,000) to so-called investment opportunities, the U.S. would offer them a green card for permanent residence in the country.

Both Stenger and Quiros (mostly Quiros) have pleaded guilty to various charges stemming from an FBI investigation into their fraud (over the AnC biotech facility project in Newport). Most of the money has been recovered. But the Vermont political machines that eagerly aided and abetted the fraudsters haven’t suffered much, if any.

The lawsuit is directed at them, and it should start with these folks from our 2016 Report.

Newport, Vermont resident Bill Stenger has his fingers in all these pies, and like any good “developer” has invested his fair share of dollars on the local crop of politicians. He gave $4000.00 to the campaign of the current governor, Peter Shumlin, and his resort project, Jay Peak, shows a $2000.00 donation to Shumlin in 2012.

He gave Patrick Leahy $4800.00 dollars in 2010

Peter Welch got $1000.00 dollars in 2014.

Ariel Quiros gave $2000.00 directly to Shumlin, $14,000.00 to the VT Democrat Party, and another $12,000.00 to the Vermont State Democrat Federal Campaign Committee- which funnels donations to support the campaigns of Vermont’s…Senators and Congresspersons.

And Q Burke Mountain Resort gave Shumlin $2K in 2014.

And according to this report, the same Jay Peak developers have donated a total of least 71,900.00 dollars to Vermont Democrats since 2011.

Developers grease wheels. A few of them, Leahy among them, promoted the program that at least briefly helped hide a Ponzi scheme. Will any of them get named or pay some price? I have not found the actual lawsuit yet, but I doubt anyone of political stature is shaking in their boots or even named in the suit.

But a guy can dream, can’t he? I’ll follow up once I have a copy of the suit.

Image courtesy of Public domain

10 thoughts on “Opinion: Sanders and Leahy should be named in Vermont’s latest EB-5 Ponzi scheme lawsuit

  1. and let’s not forget the industrial wind power plants – more evidence of transferring wealth from the average ratepayer (taxpayer) to developers – thanks to crony capitalism which dear bernie bros rail against…on paper

    • Keep in mind too, Vermont’s Public Utility Commission is a quasi-judicial board of three people with near total power to determine Vermont’s energy position. One of the members of that commission is Margaret Cheney, Current Term: 2013 – 2025. And, speaking of cronyism, Ms. Cheney’s husband, Vermont Representative Peter Welch, sits the House Committee on Energy and Commerce. No conflict of interest there, right.

  2. While att the quilty parties should be brought to justice, we should also remember that part of a political leaders job is to address areas of need. The Northeast Kingdom of Vermont has long been a economic backwater and it is no surprise the politicians from Jim Douglas to Pat Leahy were eager to find ways to help this often neglected area of our state.

    If any leader crossed ethical and legal lines they should be held accountable. It now appears clear the Shumlin Administration was deep in the muck. The evidence for the Douglas Administration and for our national leaders, who were not directly responsible for oversight, is not as clear. We shall see where this all leads.

    • The logical fallacy is, of course, that politicians have a terrible track record when it comes to developing anything except organizations that can’t compete, while, at the same time, feathering their own nests with the residual taxpayer dollars. When will we ever learn that free market transactions are the best judges of reasonable (risk v. reward) economic development? And it should surprise no one that only those who can’t, or won’t, assume the personal effort in making those risk/reward investments, do so, typically, with other people’s money.

  3. Speaker Shap Smith’s special assistant, Alexa MacLean, went up to work for the Quiros operation fairly early in the funding phase. There was a great deal of press promotion of how her joining the Quiros team would improve publicity and assembly of funds. A number of months later, with no publicity of any kind that I could see, she showed up as part of one of the big statewide lobby firms — DRM, I think. My first thought was the usual Vermont cronyism — but I now tend to think that Ms MacLean, a very well educated lawyer, quickly cooled on the job she had signed on for.

  4. You are absolutely right and you need to include Shumlin as well. He, more than the others had the dream that his stewardship of the best economic swing of any state in the union would propel him to national office. So he promoted the $$$ even when he knew Quiros was running a scam. He is the “tip of the spear” in this EB-5 scandal. It could not exist without his governmental direction and his coverup of the potential scandal to come.

    • That is certainly the fact. I was actually a little bit involved in the investigation of this at the time, since your competitor [VT Digger] had broken the story, and I was asked what I thought about it by Ms ??? the Digger CEO. I made it plain what the scam obviously was, the obvious illegalities, etc–and that Shumlin was “in deep”. Not too long after that discussion, Diggers’ pursuit of the story seemed…..um….to flag a little.

      I did not know Welch was in it, but I’m not surprised that Leahy and Sanders were participants.

      • Keep in mind too, that Pat Leahy’s wife (Marcelle Pomerleau Leahy), the niece of the late Vermont real estate tycoon, Tony Pomerleau, who had been negotiating several property deals with the EB-5 perpetrators until the scam began to unravel, was also involved in promoting these deals along with her Senator husband.

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