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Auditor finds state bungled oversight of Jay Peak EB-5 projects in massive fraud

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Auditor finds state bungled oversight of Jay Peak EB-5 projects in massive fraud


State Auditor Doug Hoffer released a 69-page report on the Jay Peak EB-5 fraud last week that finds state oversight of foreign investor funded projects in the Northeast Kingdom was marked by “misplaced trust, unfortunate decision-making, lengthy delays and missed opportunities to prevent or minimize fraud.”

The Jay Peak fraud is the largest in Vermont’s history and involved hundreds of investors from around the world who were offered a path to a Green Card in exchange for a $500,000 investment to create jobs in an economically depressed region of the United States − in this case Vermont’s Northeast Kingdom − under the federal EB-5 program.

Jay Peak President Bill Stenger traveled the world to meet with investors, ultimately raising about $400 million for eight projects at Jay Peak and Burke Mountain ski resorts, as well as in Newport. Federal prosecutors found more than $200 million of those funds were misused, with up to $37 million going into the pocket of Jay Peak owner Ariel Quiros.

Quiros attorney Bill Kelly was found to have received up to $4 million in investors’ money that was “not legitimately earned.” Both Quiros and Kelly pled guilty to a multi-year wire fraud scheme and concealing material facts in a matter within the jurisdiction of a federal agency. Quiros also pled guilty to money laundering.

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Stenger pled guilty to a single felony count of knowingly and willfully submitting false documents to the Vermont Regional Center (VRC), the state-sponsored entity through which all EB-5 projects were approved. Stenger was not convicted of illegally taking investors’ money, but the government argued he too had a financial motive beyond the “glory” of delivering unprecedented economic development to the Northeast Kingdom, as he was expecting to receive a stake in Jay Peak Resort, as well as more than $1 million from another EB-5 project in Newport.

“Three individuals were ultimately convicted of felony offenses related to the fraud, the State’s reputation was bruised by national press coverage, and in July Vermont taxpayers learned they would foot the $16.5 million bill of a global settlement reached between the Vermont Attorney General and a group of EB-5 investors,” Hoffer wrote in a newsletter accompanying the release of the report.

‘Structural design flaw’ sets state up for mishandling oversight of Jay Peak EB-5 projects

The Vermont Regional Center gave a veneer of legitimacy to the Jay Peak EB-5 projects that Hoffer said was ultimately unjustified because of a “structural design flaw” in the way the VRC was set up.

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When the Vermont Regional Center was created, oversight was given to the Agency of Commerce and Community Development, which had an immediate conflict of interest, as it was both promoting the EB-5 program and regulating it. To make matters worse, then Gov. Peter Shumlin participated in a promotional video for Jay Peak in which he said the state was auditing the resort’s EB-5 projects, which was not the case.

Hoffer reports the ACCD didn’t find out about the video until two years after it was being shown to potential foreign investors “with this misleading and confusing claim about the State’s due diligence.”

More: A ski resort, a dream and greed: How a $350M fraud happened in Vermont’s poorest region

“The (Vermont Regional Center) did not print a retraction on its website to clarify that the State was not performing financial audits of EB-5 projects, but instead merely reviewing and signing off on project-related employment data,” Hoffer wrote in his newsletter.

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$13 million in missing EB-5 funds fails to trigger investigation by state authorities

Hoffer said the state also failed to require audits when concerns about Jay Peak’s EB-5 projects were raised by Douglas Hulme of Rapid Visas USA, a Florida firm that created and promoted the original Jay Peak securities offering materials. Rapid Visas ended its relationship with Jay Peak in 2012, saying it no longer had confidence in the accuracy of representations made by Jay Peak or in the financial status of and disclosures of the partnerships.

“In a telephone call the firm told the ACCD Secretary (Lawrence Miller) that $13 million was missing from Jay Peak’s bank accounts,” Hoffer wrote. “The hint of fraud offered an opportunity for ACCD to seek help from the (Vermont Department of Financial Regulation). They didn’t.”

Instead, Hoffer wrote, Miller asked Stenger about the allegations.

“Stenger denied them and offered records in defense,” Hoffer wrote. “The ACCD Secretary said he was satisfied with the documentation Stenger provided and dropped the matter. With so much at stake, though, due diligence should have included more than a review by a non-auditor of records hand-selected by Stenger. In fact, the U.S. Attorney later determined that the records Stenger provided covered up how the defendants misused investor funds.”

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Hoffer: There are other situations where state agencies have conflicts of interest that could cause problems

The ACCD didn’t involve the Department of Financial Regulation in oversight of the Jay Peak EB-5 projects until late in December 2014. Once the DFR began investigating, along with the U.S. Securities and Exchange Commission, the massive fraud in the Northeast Kingdom began to unravel, leading to the convictions of Quiros, Stenger and Kelly.

“Unfortunately, EB-5 is not the only program for which Vermont’s state government has assigned a state agency duties that present similar conflicts,” Hoffer concludes in his newsletter. “Farm-based water quality combines both promotion and enforcement in the Agency of Agriculture, Food and Markets. Economic development grants are frequently promoted, then reviewed and funded, by ACCD.”

Hoffer calls on state officials and legislators to “dedicate themselves to reforming system flaws like these wherever they occur.”

Contact Dan D’Ambrosio at 660-1841 or ddambrosi@gannett.com. Follow him on X @DanDambrosioVT.



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Person killed in early morning crash on Route 7 in Pittsford

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Person killed in early morning crash on Route 7 in Pittsford


PITTSFORD, Vt. (WCAX) – One person died and another was injured in a two-vehicle crash involving a tractor-trailer on U.S. Route 7 early Friday morning.

The crash occurred at approximately 5:13 a.m. near the intersection with Giddings Lane in Pittsford, according to Vermont State Police.

Police said the driver of a tractor-trailer, identified as Paul Ricard, 64 of Castleton, was traveling northbound on Route 7 when the trailer became detached and stopped in the roadway facing northbound. The driver stopped and exited the vehicle to attempt to reconnect the detached trailer.

A second vehicle, operated by Christopher Cyr, 54, of Rutland, was traveling northbound on Route 7 and collided with the back of the detached trailer, police said.

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Ricard was transported to Rutland Regional Medical Center for suspected minor injuries. Cyr was pronounced dead at the scene.

Vermont State Police from the Rutland Barracks responded to the crash. Regional Ambulance Service, the Pittsford Fire Department and Pittsford First Response assisted at the scene.

The crash remains under investigation.



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Referee shortage threatens Vermont high school sports – Valley News

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Referee shortage threatens Vermont high school sports – Valley News


Vermont is in the midst of an alarming referee shortage — a problem unfolding nationwide, but one that has hit hard in a state with a small and aging workforce.

Between 2018 and 2023, the National Federation of State High School Associations reported a loss of almost 60,000 officials nationwide, a trend exacerbated by the COVID-19 pandemic.

In Vermont, officials are spread thin covering games across 23 sports at over 70 high schools in the Vermont Principals’ Association — the state’s governing body for school athletics. Trainees aren’t offsetting the number of retiring veteran officials, and the resulting gap in personnel is forcing games to be postponed or canceled.

“What was just affecting a couple sports out of the wide pool of varsity sports in the state — now it’s virtually every sport,” said Devin Wendel, president of the Vermont State Athletic Directors Association and athletic director at Mount Abraham Union High School.

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With a working population that is already strained, the persisting shortage of officials in Vermont carries a serious risk of interrupting high school seasons.

“If we don’t do something, in the next three to five years there won’t be enough of us to cover sporting events in Vermont and that is bad for all involved,” Steve Cicio — president of Vermont’s branch of the International Association of Approved Basketball Officials — wrote in a Nov. 13 email. “We are going to struggle this season with what we have for numbers,” he said.

This year alone, the association lost between 10 and 12 varsity officials, and five to six junior varsity officials, according to Cicio.

Many of those retiring have been in the business for numerous decades, with expertise in multiple sports. Their retirements mean fewer mentors for the next generation filling their shoes.

A 2023 survey of the association’s officials found that around half planned to retire by 2028.

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“Not only are we losing a large percentage of our board, but out of that 50%, a large percentage of those folks are capable and qualified to work almost any game in the state,” said Trevour Houle, a varsity basketball official of nearly 10 years. “If I were to guess, it’s going to create a snowball effect where we lose a large amount of officials — those who are left are asked to work more nights a week, those officials are probably going to get burnt out or injured, and they’re going to decide next year whether they want to do that all over again or not.”

Dwindling numbers puts a greater burden on those remaining, who are expected to cover more games across further distances than they had previously.

“You’re seeing officials that are getting overworked, trying to hustle over to get from one location to the next,” said Michael Jabour, senior director of activities at South Burlington High School and Middle School.

Varsity teams typically take priority because their regular seasons determine playoffs and championships, unlike junior varsity teams, said Tim Messier, athletic director at Lamoille Union High School. Teams at Lamoille Union lose a couple games each season because officials aren’t available, he said.

Referees are paid $97.50 for varsity and $75 for junior varsity games, plus the cost of mileage. First-time registration to be an official costs $30 and secures certification for one year. Referees can then officiate as many sports they choose to train for.

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The VPA’s officials committee increased the pay by 30% two years ago and the earnings are aligned with all other New England states, said Lauren Young, executive director of activities at the VPA.

“You take your $97.50 and it sounds like, ‘Wow, that’s a great fee for a game.’ Well, it was an hour there. You have to get to the game an hour early. The game takes an hour and a half to two hours. You shower, you’re in the locker room for 20 minutes after the game and then you have your hour ride home,” Houle said. “When you start breaking it down to an hourly rate, it’s not that great.”

Vermont’s handful of remaining referees also face continuing harassment, particularly from spectators, said Young. She suspects that poor sportsmanship is partially to blame for disillusionment about joining the force.

Among those who become certified, most new officials resign within their first three years, according to the National Federation of State High School Associations.

“They can never be right. They’re always to blame,” Jabour said. “It’s hard to be an official because you’re constantly being told how terrible you are.”

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As the VPA ramps up their recruitment efforts, Young wants to see a more accurate representation of Vermont’s student body with whistles — particularly through more women and people of color becoming certified to officiate.

“We have diverse schools, and I think there’s power in seeing people in a position of authority in the game that are reflective of what they look like to try to dispel some of the older white male dominance over the officiating world,” she said.

Nationally, the shortage could be on the mend. The National Federation of State High School Associations reported an 8% increase in registered officials this year compared to 2018.

But in Vermont, the void left by referees stepping down isn’t being filled. While the VPA is marketing to college students and tapping school administrators to spread the word about the shortage in their communities, Young expects to draw in just two or three newcomers this year.

“Even recruiting 10 officials in the state of Vermont can have a huge impact on a local high school being able to actually keep their schedule intact,” Wendel said.

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Busy Anderson is a reporter with the Community News Service, part of the University of Vermont’s Reporting & Documentary Storytelling program.



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Vermont-based fighter wing deploying to Caribbean amid tensions with Venezuela, US senator says – The Boston Globe

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Vermont-based fighter wing deploying to Caribbean amid tensions with Venezuela, US senator says – The Boston Globe


U.S. Sen. Peter Welch on Friday said the Pentagon had ordered the deployment of the Vermont Air National Guard’s 158th Fighter Wing to the Caribbean amid heightened tensions with Venezuela.

According to Welch, the deployment is part of Operation Southern Spear, which has been targeting drug trafficking in the region as President Donald Trump’s administration has sought the ouster of Venezuelan President Nicolás Maduro.

A Pentagon spokesperson on Friday referred questions to the Vermont Guard.

The 158th Fighter Wing, based in South Burlington, includes 20 F-35A Lightning II fighter jets and approximately 1,000 personnel.

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Joseph Brooks, a spokesperson for the Vermont Guard, told the Globe earlier this week that the unit had been ordered by the Department of Defense to mobilize, but he would not disclose the location or details of the deployment.

Brooks declined to comment further Friday night.

In a written statement, Welch thanked Vermont Guard members for their service but criticized the Trump administration for deploying them.

“I strongly oppose President Trump’s mobilization of the Vermont Air National Guard alongside thousands of other U.S. military units in what appears to be a relentless march to war,” Welch said. “An undeclared war against the Venezuelan regime would be illegal under our Constitution. If this president — or any president — wants to start a war with Venezuela, which has not attacked us and is not a source of the fentanyl that is killing Americans, then he needs to seek authorization from Congress, as the authors of the Constitution intended.”

Details of the deployment remained unclear Friday, though Seven Days, a Burlington newspaper, reported that the unit would be stationed at a recently reopened military base in Puerto Rico. The newspaper said some Vermont Guard members had already headed there to prepare for the deployment.

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This story has been updated.





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