The former president of Jay Peak Resort said in a court filing this week that he was an “unknowing pawn” as the state “covered up” a $200 million fraud in the EB-5 scandal that sent him and two others to federal prison.
In a six-page affidavit, Bill Stenger accused state officials, including then-Gov. Peter Shumlin, of concealing a plan to keep the Ponzi-like scheme going for several years. Stenger is currently serving an 18-month sentence for his role in the fraud.
By 2015, state regulators and commerce agency officials were aware of the extent of the fraud but did nothing to stop it, Stenger said. Instead of shutting down Jay Peak, state officials continued to promote the program, lied to investors and covered up what they knew, Stenger said in the sworn testimony. Ultimately, the U.S. Securities and Exchange Commission cracked down on the scam in April 2016.
In his affidavit, filed in support of a pending civil case brought against the state, Stenger said the state “disregarded” its enforcement responsibilities even when whistleblowers raised red flags. He also blasted what he called “misrepresentations” of the state-run Vermont Regional Center, which was responsible for administration and management of the Jay Peak projects.
Shumlin was “our most powerful and effective investment solicitor,” Stenger said. The governor attended EB-5 immigrant investor events in the United States and internationally. In those meetings, Shumlin made it a practice to “describe the state's...
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