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SEC Announces $81 Million Settlement in the Jay Peak Investment Fraud Case

On February 2nd, 2018, the Securities and Exchange Commission (SEC) announced that it has reached an $81 million settlement with South Florida businessman Ariel Quiros. Mr. Quiros has been at the center of the Jay Peak investment fraud case. According to the SEC, this money will be used to compensate investors who were affected by the misuse of funds. As of the time of this announcement, this is a proposed settlement, meaning that it is still subject to court approval.

Jay Peak Investors Were Misled  

Jay Peak is a Vermont ski resort that has been undergoing a major redevelopment. The resort was owned by a company controlled by Miami businessman Ariel Quiros. Mr. Quiros was responsible for raising more than $350 million for the project. A large percentage of this money was raised from foreign nationals, through the EB-5 immigrant investor program. This is a federal immigration program that gives foreign investors an opportunity to obtain permanent residence in the United States if they are willing to put a sufficient amount into a qualifying project.

In total, the SEC believes that Mr. Quiros raised money from at least 700 investors from 74 different countries. In the marketing materials for the investment, Mr. Quiros solicited investor funds by highlighting the fact that the money would go directly to construction projects. However, the SEC believes that much of this money was diverted for illegitimate purposes, including to support other businesses of Mr. Quiros and even for his own personal use.

The misuse of funds put the Jay Peak development project in serious trouble. In April of 2016, the SEC stepped in and froze the assets of the resort. Since that time, there have been many other developments in this case, including prominent Florida brokerage firm Raymond James reaching a settlement with authorities for its role in facilitating the fraud.

The SEC Has Also Reached a Settlement With William Stenger  

Along with the $81 million settlement, the SEC also announced that it reached a settlement with William Stenger. Mr. Stenger was the Vermont-based business partner of Ariel Quiros. Though the agency noted that it is not believed that he personally profited from the fraud, he is alleged to have played a role in the misconduct. Mr. Stenger has agreed to pay a fine of $75,000. In addition, without admitting or denying the allegations, both Mr. Quiros and Mr. Stenger consented to a permanent bar from participating in any future EB-5 immigrant investor offerings.

We Represent Investors in Jay Peak Litigation

At Carlson & Associates, P.A., our law firm is representing investors in Jay Peak litigation and in other related claims. If you invested in the Jay Peak redevelopment project, or any other related matter,, we are interested in speaking to you. You may have been provided false or materially misleading information. For a fully confidential review of your legal case, please contact our Miami office today at 1-(305)-372-9700.

Resources:

sec.gov/news/press-release/2018-10

sec.gov/news/pressrelease/2016-69.html

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