EB-5 investors suing state ask for court-appointed receiver

Published: Oct. 26, 2017 at 9:50 AM EDT
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The state-run center that helped get foreign EB-5 investments to the state is already shutting down, but some investors who were allegedly defrauded say they want more management of it as it does.

Five investors, who are already suing the state, want a receiver to be appointed to the state's foreign investment program.

"An independent and experienced expert in immigration and securities law to bring accountability to the Vermont Regional Center," said

Russ Barr, the attorney representing the investors. He says the investors entrusted hundreds of millions with the Jay Peak project in exchange for immigration benefits. The group has accused state workers at the Vermont Regional Center of misguiding their money by working with fraudulent project developers. "The Vermont Regional Center's lawyers have asserted immunity, they have refused discovery, and they have rejected public records requests."

"We support the investors being made whole here. We think people should get their money back, just not through this case," said Vermont Attorney General TJ Donovan. The His office has filed a lawsuit of its own against Jay Peak's project leaders. They've also filed a motion to dismiss EB-5 investor claims against state employees, arguing the state is immune from lawsuits. "There should be accountability. There should be transparency. But those questions are not going to be answered through this lawsuit, which essentially has said that the state conspired to defraud investors -- there hasn't been any evidence of that."

But Barr says there is evidence. His motion includes what he says is a VRC marketing flyer that promised expedited green cards to those who invested through the state's program. "Credibility of the state of Vermont with governmental responsibility and oversight means that investors' petitions are given priority by USCIS -- that's a false statement and they should know that that's false. That's fraud," he said.

The Governor says he backs Donovan and doesn't support a receiver, but he would not go as far as saying state workers committed no wrongdoings.