Investors in Tram Haus Lodge will receive a full repayment of their investment. (Jay Peak/Facebook)
Exactly one year after securities fraud charges were filed against Jay Peak and Burke Mountain Resort owner Ariel Quiros and resort President and CEO Bill Stenger, financial firm Raymond James Financial, Inc., has agreed to pay a $150 million settlement over its role in the alleged fraud relating to EB-5 projects in Vermont’s Northeast Kingdom.
Jay Peak Receiver Michael Goldberg announced settlement funds will be used to pay approximately 42 contractors, 513 trade creditors and 169 project investors who were financially impacted by the alleged fraud. Vermont and the SEC allege that Quiros made false statements and omitted key information while raising more than $350 million from EB-5 investors to construct ski resort facilities and a biomedical research facility. More than $200 million was misappropriated to fund deficits in earlier projects.
“Repayment of contractors, municipalities and businesses has been a top priority for me, along with ensuring the ongoing viability of the resorts in support of the local economy, and this is an important milestone towards those goals,” said Goldberg.
“This is significant for the hundreds of businesses, contractors and investors that have been harmed by this alleged fraud,” said Vermont Govenor Phil Scott. “I want to thank our Department of Financial Regulation and Mr. Goldberg for their work in securing these settlement funds, which will make whole many of the impacted individuals and businesses. There is still more work to do to seek justice in this matter, but this is an important step that means a lot for the state and the Northeast Kingdom.”
Paying up debts clears the way for the possibility of selling the resorts to new owners.
$17.5 million will be used to complete cottages, a recreation center and fields as part of the Stateside Hotel at Jay Peak.
Burke Mountain Academy will receive $3 million for a deferred compensation agreement entered when it sold the Burke Ski Resort in 2005, $1 million of which will be used to construct a new ski lift.
Despite the legal troubles, Jay Peak has thrived this winter, racking up 491" of snow and skier visits up 35 percent over last year.
Jay Peak’s tram will close for the winter season, as scheduled, after operations on Sunday, April 16. A $5 million upgrade project will begin on Monday, April 17 and the tram is scheduled to re-open this summer.