MONTPELIER, Vt. (WCAX) - One of the key players in the Kingdom Con investigation, along with former Shumlin administration officials, will not have to testify before a judge in the criminal case ahead of his sentencing later this year.
Former Jay Peak president Bill Stenger was slated to appear in front of a federal judge Thursday for an evidentiary hearing ahead of his sentencing. But he won’t have to after a deal reached last month between Stenger’s legal team and federal prosecutors.
Stenger pleaded guilty to providing a false statement to investigators in connection with the Ponzi scheme. Ariel Quiros and William Kelly also pleaded guilty to charges associated with the scam. The EB-5 fraud swindled foreign investors seeking green cards out of investments in projects located in Newport, Burke and Jay.
Legal analysts call EB5 one of the most significant fraud cases in Vermont history. “We’re not just talking about money, but we’re also talking about people’s ability to live legally in this country,” said Jessica Brown a former public defender and a visiting professor of criminal law at Vermont Law School. “They’re not just thinking they’re investing in a new biotech company and they’re going to get their financial investment back, but they’re also going to be able to come to the US and live here legally.”
At the same time, there are separate civil lawsuits alleging top state leaders allowed the fraud to happen.
Last week, Department of Financial Regulation Commissioner Pieciak spoke out for the first time on his connection to the Kingdom Con case and investigating the fraud. He says the FBI, Securities and Exchange Commission, US Attorney’s Office, Internal Revenue Service, and others have looked into Stenger’s allegations against the state and have not found any indication of criminal activity.
In a Sept 20th sentencing memo, the US Attorney’s Office outlines a timeline of Stenger’s role in the fraud and how lied to state investigators. An Oct. 4th stipulation agreement between Stenger and prosectors confirms that Stenger agrees with the details in the sentencing memo.
“The facts show that Stenger was not just a bystander to the fraud that occurred, but an integral part of the sweeping fraud scheme, which could not have happened without his involvement,” the Sept 20th filing reads.
Governor Phil Scott last month declined to appoint an outside investigator to look into whether the projects were improperly overseen, saying it is not needed at this time. According to Communications Director Rebecca Kelley, multiple authorities are already looking into the matter for any wrongdoing, including federal investigations, a review by the US Attorney’s Office, and a review by State Auditor Doug Hoffer.
“These independent investigatory organizations, as well as the state auditor, have unfettered access to all state documents and state employees past and present. If there was any evidence of impropriety by state officials, Governor Scott would expect any or all these federal law enforcement agencies to aggressively investigate and prosecute,” Kelley said.
Attorney General T.J. Donovan could also investigate, but his staff says there are no plans to do so because it would create a conflict of interest. His office is tasked with defending state employees - and by extension - the former Shumlin officials, but they’re also supposed to represent the public.
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