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Articles Tagged with Jay Peak Resort

Businessman Settles SEC Case Over Immigrant Visa-Related Investor Scam

Ariel Quiros, a businessman accused of defrauding foreign investors seeking to earn US residency through the EB-5 Immigrant Investor Program, has agreed to the settle the Securities and Exchange Commission’s case against him. As part of the settlement, which a court still has to approve, Quiros will be held liable for over $81M in disgorgement of ill-gotten gains and a $1M penalty. He also has to forfeit about $417K.

Over 700 investors from at least 75 nations invested with Quiros. Their funds were supposed to go toward “construction projects at the Jay Peak Resort and a proposed (nearby) biomedical research facility,” said the SEC. Instead, contends the regulator, Quiros misused over $50M to buy another ski resort and pay for his own spending, including the purchase of two luxury condos. He also failed to direct about $30M to the construction projects, which was necessary for these investors to become US residents.

Now, Quiros must give up the two condos and the resort that he bought using investors’ funds, as well as surrender his ownership stake in Jay Peak and many other properties.

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Raymond James Financial Inc. (RJF) has agreed to pay $150 million to resolve all investor claims involving the Jay Peak Resort’s immigrant visa fraud. The EB-5 scam was created in 2007 by third parties and offered to foreign investors.

Although settling, the firm noted in a statement that it was never the placement agent for the fraudulent program nor did it play any other role in the scam. Raymond James also stated that it was never involved in selling the investments. The broker-dealer said that the Raymond James Financial advisor that worked with the brokerage accounts of the investment partnerships involved in the scam is no longer working the firm.

Already, investors have brought several lawsuits over this fraudulent EB-5 Immigrant Investor program. They had invested in a number of related projects at the Jay Peak ski resort. They did so to help themselves gain permanent US residency.

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Goldman Sachs and Reno, NV Settle Securities Fraud Case 
According to the Reno Gazette-Journal, the city of Reno is about to settle its securities fraud lawsuit against Goldman Sachs (GS) for $750K. Nevada’s capital city claims that the firm misled it into taking on risky debt that nearly caused Reno to become insolvent. The Reno City Council will vote on approving the settlement next week. Other details of the settlement remain undisclosed at this time.

The auction-rate securities lawsuit involved over $210M in bonds issued by Reno in ’05 and ’06 to refinance the debt for an events center and another facility. The city claims that Goldman Sachs never disclosed that the ARS market was very risky or that the firm was bidding interest rates down to hold up the market.

When the financial collapse happened in 2008 and banks ceased to bid on auction rates, rates went soaring. This left Reno with a 15% debt interest rate and millions of dollars in penalties that it now owed Goldman. For example, in 2012 Reno paid the firm $2.6M. It paid the Goldman Sachs $7M the following year.

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