Former Jay Peak president pleads guilty in ‘Kingdom Con’ case
BURLINGTON, Vt. (WCAX) - Former Jay Peak President Bill Stenger on Friday pleaded guilty in federal court to lying to government officials in connection with the state’s largest-ever fraud case.
Five years after the Northeast Kingdom development initiative unraveled under allegations of fraud, Stenger accepted a plea deal with federal prosecutors that dropped 13 charges of fraud related to the EB-5 program.
From the beginning, Stenger was the local face behind the massive development project that led to a multi-year criminal and civil investigation and allegations of a Ponzi-like scheme that defrauded foreign investors out of tens of millions of dollars.
He first tapped into the EB-5 program in 2006 to bring investment to the Jay Peak Resort, which added numerous amenities. Later, with Florida business partner Ariel Quiros, more projects were planned including the redevelopment of downtown Newport and bringing in a Korean biomedical company. But federal prosecutors say the biotech project was a fiction only meant to draw in more investors and conceal that other investor funds had been misused.
Stenger on Friday maintained he was not in on the fraud scheme and said he’s sorry for the community. “Since this whole issue erupted, I have spent every day that I could trying to help Newport through the trials it is going through. Through community development meetings, supporting the schools, and other economic development initiatives,” Stenger said. “I live there. I care about that city, and I have done everything I have possibly have been able to do in my own way since 2016. And I dare say that the communtiy would agree with that.”
Stenger could get up to five years in prison and $250,000 in fines but his lawyer plans to argue for no jail time at sentencing. “Bill Stenger never engaged in a fraud on the AnC Bio investors, or on the people of the Northeast Kingdom. In fact, his heart is broken because he knows that they are suffering the most,” said Brooks McArthur, Stenger’s lawyer.
Quiros and another man, William Kelly, have also pleaded guilty, so there will be no trial. But federal prosecutors are planning a multi-day hearing in October to lay out their entire case for the judge, who will hand down the sentences.
MIXED REACTIONS FROM NORTHEAST KINGDOM
Bill Stenger’s guilty plea brings just one chapter of the EB-5 saga to a partial close. And while some people we spoke to in the Newport area say it brings a sense of closure, others say they’ve already moved on, setting their sights on the future.
Five years after the scandal first broke, its effects are still visible, with two ski resorts in receivership and a massive hole in the middle of downtown Newport. Some say Friday’s plea deal didn’t go far enough. “To me, it’s not really that much of a gain to put him away for that long in the first place because we’re the ones still paying for it our of our pocket - the taxpayers,” said Roland Deslandes of Newport.
Others say Stenger got wrapped up in something bigger than himself and they’re hoping the Kingdom can heal. “I hope they can give back in some way that’s been meaningful. It’s been hard on everyone, local businesses -- mom and pop businesses --all the way up through to the people that are still at Jay Peak, suffering because of this,” said Nicole Davis of Brownington.
State leaders say that it’s clear Ariel Quiros, who is facing up to eight years in prison, was pulling the strings. DFR Commissioner Mike Pieciak, who helped lead the state’s investigation into the fraud, says Stenger leaves a mixed legacy. “Tarnished by the fraud and the guilty plea, but it also brings closure and accountability to those harmed,” he said.
Newport leaders say they’ve moved on and are focusing on growing the city and making it more resilient. What’s satisfying is riding that negative tide and looking at what we’ve actually done. The implementation speaks for itself for where we’re actually going,’ said Newport City Manager Laura Dolgin.
And that development is already happening. A big influx of grants from the state are working to revitalize the city. Recreation trails now wrap around Lake Memphremagog, cross into a new boardwalk, and empty into a conservation area.
And flowers and gardens line the streets. “We’re going to make ourselves a tourist destination for tourists, for ATVs, mountain bike enthusiasts, families, and others to come here and take the best of what Newport has to offer,” Dolgin. said.
And Jay Peak is also moving along, with crews putting the finishing touches on new condos that will be ready to welcome guests from across the globe.
Stenger’s plea deal is just one facet of the Kingdom Con scandal that’s coming to a close. There are still questions about the future owners of Jay Peak and Burke, the role state leaders played in oversight of the EB-5 program, and what’s going to happen to the former site of AnC Bio.
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