As The Slopes Begin To Thaw, Jay Peak’s Assets Are Frozen.

As The Slopes Begin To Thaw, Jay Peak's Assets Are Frozen.
Jay Peak Ski Resort president Bill Stenger

Last Thursday, the Securities & Exchange Commission announced “fraud charges and an asset freeze against a Vermont-based ski resort and related businesses allegedly misusing millions of dollars raised through investments solicited under the EB-5 Immigrant Investor Program.

That “Vermont-based ski resort” is Jay Peak, Vermont’s northernmost ski resort. The mountain is perhaps as well known for its use of the EB-5 program as it is for great terrain and snow conditions.

For those of you who don’t know what the EB-5 program is – the program is a path to U.S. citizenship through investment. The program requires applicants to “invest $1,000,000, or at least $500,000 in a targeted employment area (high unemployment or rural area)

Jay Peak has used the EB-5 program to raise “over $350 million from foreign investors to expand its facilities and create local jobs“. While some of the funds were indeed used to expand the Jay Peak facilities and create jobs, according to the SEC, $200 million was misappropriated including “$50 million of investor funds intended for an expansion of the property [used for] personal expenses“.

The SEC charges that the owners of Jay Peak, Ariel Quiros and William Stenger, inappropriately used funds for things like; “buying Jay Peak from its previous Canadian owners, and the funding of credit lines, income tax payments, purchases of real estate, and the repayment of sizable margin loans“.

Quiros lives in Miami according to investigators and shortly after the SEC announcement a “federal judge in Miami ordered the assets of Jay Peak and related businesses frozen“.

As the Vermont ski season comes to an end and the mountains begin to thaw, Jay Peak (assets) will remain frozen. At least the SEC waited for the end of ski season!

 


About Ben Kotch:

Ben Kotch is a managing director and investment committee member at Acquis Capital, LLC, a private investment firm that specializes in acquisition funding. He has extensive experience with both private and public companies. Ben graduated with an economics degree from Bentley University where he concentrated in entrepreneurship and law.

For more, please follow on Twitter.


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