Audit finds inadequate state oversight in Vermont’s largest fraud case

The state of Vermont did not provide adequate oversight to prevent the massive fraud that occurred in ski area and other development projects funded by foreign investors’ money through a special visa program, a state audit has found.

The financial scandal first revealed in 2016, which became the state’s largest fraud case, shook Vermont and the economically depressed region called the Northeast Kingdom.

In 2018, Vermont’s former attorney general asked for an audit of the state’s involvement in the projects at Jay Peak and Burke resorts to address the loss of trust in state government from the fraud, State Auditor Doug Hoffer wrote in the report released on Thursday. The audit was completed after the legal proceedings concluded, he wrote.

The findings should not be entirely surprising, Hoffer wrote.

“In short, we found a pattern of misplaced trust, unfortunate decision-making, lengthy delays, and missed opportunities to prevent or minimize fraud,” Hoffer wrote.

Ariel Quiros, a Miami businessman and former owner of two Vermont ski resorts, was sentenced in 2022 to five years in prison for his role in a failed plan to build a biotechnology plant in Newport using tens of millions of dollars raised through the EB-5 visa program. Under the program, foreigners invest $500,000 in U.S. a project that creates at least 10 jobs in exchange for a chance to earn permanent U.S. residency. William Stenger, the former president of Jay Peak, and William Kelly, an advisor to Quiros, each got sentences of 18 months.

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