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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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Poll: Most young Vermonters say they’re likely to leave state amid affordability concerns – VTDigger

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Poll: Most young Vermonters say they’re likely to leave state amid affordability concerns – VTDigger


University of Vermont students gather at a protest on campus in Burlington in April 2022. File photo by Glenn Russell/VTDigger

Theo Wells-Spackman is a Report for America corps member who reports for VTDigger.

Nearly two-thirds of Vermonters ages 18 to 34 say they’re likely to leave the state within five years in search of adventure or a cheaper place to live, according to a poll from the University of New Hampshire.  

Overall, the poll estimated that 86% of Vermonters find the state at least somewhat unaffordable.

“The issue of affordability has been a very important thing across New England,” said UNH political science professor Andrew Smith, who runs the institution’s survey center. The poll, released Tuesday, includes response data for five New England states, excluding Maine.

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In general, the survey found, most residents say Vermont is a good place to live — or even a great one.

Nevertheless, about 40% of Vermonters of all ages want to leave the state, according to the report from Smith’s team. Housing prices and other cost-of-living concerns are the foremost drivers of the trend, researchers found, followed by tax rates. Connecticut and Rhode Island showed similar overall rates of desired departure.

Among young people, though, Vermont’s numbers stand out.

Smith’s research found that 63% percent of Vermonters between 18 and 34 say they’re somewhat or very likely to move out of the state in the next five years. That’s a much higher rate of planned departure than in any other state surveyed. Responses varied from 28% in New Hampshire to 44% in Connecticut. 

But according to Smith, New England often sees a beneficial “boomerang effect”: former residents eventually returning to their home states, often as higher earners.

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In a Wednesday press conference, Gov. Phil Scott said that although he hadn’t seen the poll, he wasn’t surprised by reports that many Vermonters are considering a move.

“I think there’s a lot of frustration out there,” he said. “We have a lot of work to do to make Vermont the affordable state that these folks need.”

About half of young Vermonters who said they want to move away cited the cost of living as a primary reason, while roughly as many said they were looking for a “new adventure or more excitement.” By contrast, less than a quarter of those older than 64 foresee leaving, according to the poll. 

Outmigration of young people could worsen the state’s existing workforce shortage, according to Kevin Chu, who leads the research nonprofit the Vermont Futures Project. Scott’s administration has made workforce development a priority in light of what his office called a “growing demographic crisis.”

Chu added that by design, services such as public education and healthcare are supported disproportionately by working households that tend to pay higher taxes and insurance premiums. When the base of income earners shrinks, the problem can then intensify for those bearing the brunt of rising costs, he added.

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“There’s a demographic reality in which the economic burden is being shouldered by a small and shrinking pool of young working-age people,” Chu said.

Tuesday’s poll also indicated that Vermonters who have completed more education say they’re less likely to leave the state. For Chu, that’s likely because such households tend to earn more — and also because they tend to be older.

Julie Lowell, deputy director of the Montpelier research nonprofit Public Assets Institute, offered a grain of salt in relation to Tuesday’s report. While migration is crucial to keep track of, Vermont’s overall population turnover tends to be about 5% or less each year, she said. And although the state does have an unusual number of young people intending to leave, that age group is always the most mobile in any study, she said.

In recent years, more of Vermont’s older population has possessed more wealth to contribute to public services, Lowell added. For example, she said, her organization has found that more Vermonters aging out of the workforce has not appeared to decrease state tax revenues in recent years. 

But it’s true that many Vermonters are struggling to make ends meet, she said. The state’s lowest earners have seen low wage growth in relation to other New England states, she said, and basic needs are getting harder to cover.

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“We’re seeing prices, in large part driven by housing and healthcare, really outpacing our increases in household incomes,” Lowell said. “Many people are feeling insecure.”





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Vermont offers money to replace diesel vehicles with electric

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Vermont offers money to replace diesel vehicles with electric


Vermont officials are offering $5.9 million in funding to help replace older diesel-powered vehicles and equipment with electric alternatives across the state.

The Vermont Department of Environmental Conservation is accepting applications for the funding through the Volkswagen Environmental Mitigation Trust, according to a community announcement. The program aims to reduce emissions by supporting conversions to all-electric equipment used in transportation and industry.

The new funding is open to a wide range of vehicle and equipment types, including class 4–8 trucks, school buses, transit buses, forklifts weighing more than 8,000 pounds, airport ground support equipment, freight switchers and certain marine engines.

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Eligible applicants include federal, state, regional and municipal agencies, along with public institutions and private businesses whose vehicles operate in Vermont at least 80% of the time.

Public entities can receive up to 85% of project costs, while private businesses may qualify for up to 75%, according to the announcement.

The opportunity may be particularly relevant for farms, food producers, food hubs and distributors that rely on diesel-powered trucks or heavy equipment.

Applications are accepted on a rolling basis, with submissions due by the last day of each month until December 2026 or until funding runs out.

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Applicants can review full details at https://dec.vermont.gov/air-quality/vw-environmental-mitigation-funds/vw-request-applications.

This story was created with the assistance of Artificial Intelligence (AI). Journalists were involved in every step of the information gathering, review, editing and publishing process. Learn more at cm.usatoday.com/ethical-conduct.



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Vermont Superior Court mourns Judge Dickson Corbett – Valley News

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Vermont Superior Court mourns Judge Dickson Corbett – Valley News


THETFORD — Vermont Superior Court Judge Dickson Corbett died unexpectedly last week.

Former colleagues said Corbett was found unresponsive Thursday morning and was taken to Dartmouth Hitchcock Medical Center, where he was pronounced deceased. Colleagues and friends said he died of natural causes.

Corbett was in his mid-40s. His death cuts short a career characterized by an intelligent, kind and community-oriented approach to the law, his colleagues said.

“His passing is a devastating loss to our communities,” Kiara Senecal, co-executive director of Orange County Restorative Justice, said in an interview. “He was doing what he was doing for the right reasons, and that truly showed up in his work.”

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Efforts to reach Corbett’s family were unsuccessful. His wife, Megan Campbell, is also a lawyer and works in the Vermont Attorney General’s Office. They have two children, ages 16 and 13. After years living in Chelsea, a short walk from the Orange County Courthouse, they moved to Thetford around the time Corbett became a judge.

Corbett’s mild-mannered and soft-spoken demeanor was backed by a deep knowledge and understanding of the law and a commitment to public service, colleagues said.

“He was a dedicated public servant,” Will Porter, the former Orange County state’s attorney who hired Corbett as a deputy in 2013, said in an interview. Corbett “never saw the law as a means to make money,” Porter said.

A native of Pennsylvania, Corbett earned a bachelor’s degree in English at the University of North Carolina, and graduated from Vermont Law School in 2007 with juris doctor and master’s of environmental law degrees.

“I just recall that he was very active,” said Shirley Jefferson, who was then the law school’s associate dean of student affairs and diversity. He was community-oriented, and also took an interest in the school and its well-being, she said.

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He clerked in Orange and Windsor county courts while working out his career plans, and when Porter hired him in 2013, judges had assured him that Corbett was a bright light.

He quickly proved himself to be a strong researcher, an excellent writer, a patient listener with victims and witnesses who also could build good relationships with judges, Porter said.

“He made light-strides the first year he was here,” he said.

Corbett was so capable that Porter assumed he’d quickly move on to bigger things, but instead the young deputy immersed himself in the job and stayed for a decade, taking over for Porter after he retired in 2021.

In addition to his work, Corbett served as the town moderator in Chelsea and served on the town Planning Commission before moving to Thetford.

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Corbett’s approach to the law put politics to the side. He remained an independent, but both major parties recommended his appointments as state’s attorney and as judge.

He was eager to be a judge, mainly because he felt he could help more people in that role.

“He was a true scholar of the law, so it was natural for him to be a judge,” Orange County State’s Attorney Colin Seaman, whom Corbett hired as a deputy, said in an interview.

“He was just the most wonderful,” Michelle Donnelly, Washington County state’s attorney and a close friend of Corbett and his family, said in a phone interview. “He was so smart and had such a capacity to research and study the law, but he was also incredibly kind and compassionate. … He wanted to understand people’s stories.”

Corbett had all the makings of a jurist who would fit well on either the state Supreme Court or the federal bench, Porter said. But at the same time, he was not one to chase a title or acclaim, but wanted to find ways to be of help, Donnelly said.

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“It was about what he could do through the work,” she said.

‘A profound loss’

Official statements about Corbett’s death stress how great a loss this is for the judiciary. He was assigned to hear cases in Windsor County and was overseeing several with a high public profile.

“I am saddened to learn of the passing of Judge Dickson Corbett,” Gov. Phil Scott, who appointed Corbett to serve as Orange County state’s attorney in 2021 and as a superior court judge in 2023, said in a statement. “I always appreciated his dedication to improving the lives of Vermonters through public service. This is an unfortunate loss for Vermont and the Judiciary, and my heart goes out to Dickson’s family, friends, and colleagues during this difficult time.”

“This is a profound loss for the judiciary and for the many people whose lives were touched by his dedicated public service,” Court Administrator Therese Corsones and Chief Judge Thomas Zonay said in a statement last Thursday.

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A conversation with Corbett helped turn Seaman into a public servant after 20 years in private law practice. In court in Chelsea one day in early 2023, Corbett talked to him about an opening in the Orange County state’s attorney’s office. He took the job and replaced Corbett soon after, when Corbett became a judge.

“All I can say about him,” Seaman said, “he is the one who always strived to do what was right.”



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