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AG Charity Clark says proposed $16.5M EB-5 settlement will protect state from future lawsuits

The Tram Haus Lodge at Jay Peak was one project invested in by foreign investors through the EB-5 program. The federal government has terminated the state-run Regional Center that oversees EB-5 projects in Vermont.
Angela Evancie
Vermont Public File
The Tram Haus Lodge at Jay Peak was one project supported by foreign investors through the EB-5 program.

One of the final chapters in the Northeast Kingdom EB-5 investment scandal could be coming to a close. It’s been seven years since federal regulators revealed that two prominent developers embezzled more than $200 million meant to fund projects in the struggling region. Properties like Jay Peak ski resort, Burke Mountain and an empty lot in the center of Newport were placed under control of a receiver.

Once the fraud was revealed it was unclear if investors would get their money back — and if they’d get their green cards promised under the EB-5 investment program. The state faced more than 30 lawsuits alleging it didn’t properly oversee the EB-5 program.

But on Wednesday, the Attorney General’s office announced that the state was prepared to pay $16.5 million to settle those cases. The global settlement also includes a bar order, which would prevent any future lawsuits from being filed.

Vermont Public's Liam Elder-Connors spoke to Attorney General Charity Clark about the potential settlement. Their conversation below has been edited and condensed for clarity.

Liam Elder-Connors: To start off with, Vermonters have been told for years the state's role in EB-5 was on the up and up. So why settle the case instead of going to trial? And should we interpret your willingness to settle as a concession that there were potentially problematic actions that the state took?

Charity Clark: No, we were confident in our litigation position. But we had an opportunity to do this at a time when the receivership still existed. So that enabled us to receive a bar order, which prevents potential future lawsuits against the state. And that is the most effective thing we could do to protect the state and remove risk.

Well, kind of following that, is there any analysis on your part that the settlement was also done to prevent people like former Gov. Peter Shumlin or now Treasurer Mike Pieciak and other prominent state officials from having to testify at a trial?

No, that didn't come into my calculation. There were 850 investors in the EB-5 projects, and collectively they invested over $400 million. So that is a tremendous amount of risk for the state. And this enabled us to obtain that bar order.

So the proposed settlement amount is $16.5 million dollars. Where's that money going to come from? Is that from taxpayers, the general budget, where's the state going to find that money?

Well, this is a structured settlement, meaning it occurs over a number of years. And we are currently pursuing contribution from the state's insurance carrier, but most of the money is coming from the state's self-insurance liability fund. And the rest, we are hoping we can avoid paying by helping the remaining investors who don't have green cards get those green cards. Otherwise, if we're unable to bring that number down, we will work with the Legislature and the governor for the remaining money.

How did you arrive at the $16.5 million figure?

You know, that's a a mediation dance that is always done in mediation. And you know, different numbers are thrown out. We were fortunate to have a very skilled and effective mediator. This was a settlement that came from court-ordered mediation.

And is that money going to be going back to individual investors?

So the funds will go to the receivership and the receiver will — you know, that's not our job. That's the receivership's job. So we'll wait to see what happens there.

The settlement, like you mentioned, also includes a provision that the state of Vermont will help investors to get their green cards. What can the state do to help with that process, which is ultimately something that a federal agency is going to decide?

Well, we have an immigration attorney who we're working with. And we'll be meeting with others to make sure that we're doing all that we can to get those remaining investors their green cards, and in doing so bring down the total amount of settlement money that we'll have to pay.

The Attorney General's Office has withheld hundreds of documents related to the state's oversight of the EB-5 program on the basis that the documents are related to these ongoing lawsuits. Now that current and future EB-5 cases are set to be resolved, will your office release all of those records?

There's a plan in place already to release the records. Now that the settlement is behind us we'll be turning to sort out what the plan is there with the auditor.

Any of the documents that were previously withheld because of the ongoing litigation, can we expect that those will be now available to the public?

They'll be available according to the plan. Yeah.

And what is that plan?

I don't have it in front of me; I'm sorry. I don't know exactly what the details of the plan are. But there is a plan in place that was put in place a number of years ago.

So this proposed settlement has not been approved yet. And I'm wondering, what are the next steps to get it approved? And when might that happen?

So we'll be acting as quickly as possible to get this fully wrapped up, and as you mentioned, that's right, a federal court will have to approve the settlement in order to affect the bar order.

And this settlement was really focused on the lawsuits that were brought by EB-5 investors, but those weren't the only people that were hurt by the fraud. There's still an empty lot in the middle of Newport that was slated to be developed by Ariel Quiros and Bill Stenger. Burke Mountain Resort's under receivership, though it does sound like there's a potential buyer. I'm wondering what else can the state do to make up for all the remaining broken promises in the Northeast Kingdom?

Well, we're fortunate the receivership is working on some of that property. And it's important that we move on from this chapter. I think it's great to have this in the rearview mirror, and be at this moment in time where we can be looking forward and not backward.

Questions, comments or tips? Send me an email at


Liam is Vermont Public’s public safety reporter, focusing on law enforcement, courts and the prison system.
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