SAM Magazine—Newport, Vt., July 11, 2018—Vermont attorney general T.J. Donovan said in a press conference today that the state has settled its civil lawsuit against former Jay Peak owner Ariel Quiros and former Jay Peak CEO Bill Stenger. The case has been pending since 2016 after the two men were accused of misappropriating millions of dollars in EB-5 foreign investor funds. Quiros will transfer five Vermont properties to the state to satisfy his $2 million settlement, and Stenger will pay $100,000 to the city of Newport, which will be earmarked for economic development.

The agreement is subject to court approval. The state will drop its civil suit against both men if approved.

Following the Securities and Exchange Commission’s April 2016 seizure of Jay Peak and Burke Mountain, both federal and state regulators brought lawsuits against Quiros and Stenger. The federal case was resolved in February, when Quiros agreed to surrender $81 million in assets to the feds, and Stenger paid a $75,000 penalty.

In other news, a lawsuit pending in federal court claims Stenger paid immigration lawyers $25,000 for every foreign investor they brought into the EB-5 program offerings for projects in Vermont’s Northeast Kingdom. The lawsuit says more than 100 immigration lawyers received a total of $5 million in “kickbacks.” The plaintiffs are a group of EB-5 investors that say the nine defendants, all immigration lawyers, both represented them and took money from the resort, so there was a conflict of interest, among other claims.

According to a source, Stenger was simply paying commissions for referrals, not kickbacks. According to the SEC, only licensed broker-dealers can accept commissions because EB-5 offerings are securities offerings.

In addition, the federal government has ordered the immediate shutdown of the maligned Vermont EB-5 Regional Center, which oversees EB-5 projects in Vermont.

In a "Notice of Termination" issued last week, the United States Citizenship and Immigration Services (USCIS) said the Vermont Regional Center that was supposed to serve as an EB-5 watchdog failed "to provide adequate and proper oversight, monitoring, and management of its projects."

The state plans to appeal the decision, arguing that whatever flaws the Regional Center had in the past have been corrected since 2014, when EB-5 oversight was transferred from the Agency of Commerce and Community Development to the Department of Financial Regulation.

Commissioner of Financial Regulation Michael Pieciak said, “Our argument to USCIS is, we now have a Regional Center that has robust oversight, robust authority, expertise in this area. And there’s really no reason to have the past crimes or the past issues that have come up reflect poorly today.” Pieciak isn’t actually arguing to keep the Regional Center open indefinitely, but wants there to be a gradual wind down so ongoing projects can come to a conclusion.

It’s unclear how an immediate shutdown would affect foreign investors’ path to legal residence in the United States—which is at the heart of the program, and the return for a minimum $500,000 investment into development projects that create jobs—or EB-5 funded projects already underway in the state.

Mount Snow, Vt., which has an EB-5 project underway, received federal approval to start its own Regional Center in 2017.