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Kingdom Con: The history of Vermont’s biggest fraud case

Published: Apr. 13, 2022 at 5:25 PM EDT
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BURLINGTON, Vt. (WCAX) - Another chapter is set to close on the Kingdom Con. Thursday, Bill Stenger, the former president of Jay Peak, will be sentenced for his role in the massive fraud.

He promised to help transform the Northeast Kingdom into a tourist destination and a technology hub.

“This is a wonderful day for our community and for our state,” Stenger said in September 2012.

Even state and congressional leaders bought it.

“Jobs know no political party. They know no philosophy. What they know is we need them and there’s no better example of creating jobs, I believe, in the history of this great state,” then-Vermont governor Peter Shumlin said.

But the dream Stenger pitched for the area he said he loved, turned into a nightmare and literally left a mark on the community-- a hole in the heart of downtown Newport.

The former Jay Peak president became a king of the kingdom, if you will, skilled at bringing cash to one of the most economically challenged parts of the state. There were major makeovers at Jay and Burke Mountain, and an entire block in Newport was brought down to make way for better businesses and a hotel.

Stenger did it through federal EB-5 money. Foreign investors paid $500,000 to help create job-generating businesses in exchange for a path to U.S. residency.

He first tapped into EB-5 funds in 2006. For more than a decade, 800 investors from 74 countries would fund numerous projects that Stenger said would spawn 10,000 jobs.

Until the king’s castle came crumbling down.

In 2019, federal officials announced it was a sham. A multiyear investigation uncovered the largest fraud case in Vermont’s history, the great Kingdom Con.

Stenger and his business partner Ariel Quiros moved so much money around, that the diagram looked more like a bowl of spaghetti.

Some $450 million was raised for kingdom projects. The feds say $200 million was misspent, plugging financial holes and covering expenses for other projects and a never-built biotech company the feds say that was pure fiction.

Then there’s the $50 million Quiros allegedly diverted for his own personal use, like a condo in Trump Tower.

Stenger says Quiros was the mastermind behind the Ponzi-like scheme and he was duped, too. But he admits he lied to government officials after the scam blew up.

A stark reminder of that remains on Main Street, though the kingdom is resilient and grant money continues to help.

And the investments made at Jay and Burke did spur some economic growth.

But for the man who was once seen as the golden boy, his reputation is tarnished forever.

“I live there. I care about that city. I have done everything I’ve possibly been able to do, in my own way, since 2016. And I daresay the community would agree with that,” Stenger said in August 2021.

Under Stenger’s plea deal, all the fraud charges against him were dropped. Stenger pleaded guilty to one charge of providing a false statement to the government.

He is asking the judge for home confinement citing health issues, financial hardship and great remorse for his role in the fraud.

Prosecutors are asking that Stenger serve five years behind bars.

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