Two Individuals Charged with Wire Fraud in Second Superseding Indictment Connected with Vermont Kidnapping and Murder
The United States Attorney’s Office announced that Ariel Quiros, 65, of Puerto Rico, and formerly of Key Biscayne, Florida, was sentenced today to 60 months in prison by Chief Judge Geoffrey W. Crawford in United States District Court in connection with his involvement in the AnC Vermont EB-5 investment project. Chief Judge Crawford also ordered Quiros to serve a three-year term of supervised release and to pay $8,338,600.77 in restitution. Today’s sentencing follows Quiros’s guilty pleas in August 2020 to three felony charges: conspiring with co-defendants William Kelly, Jong Weon (Alex) Choi, and William Stenger in a multi-year wire fraud scheme to defraud immigrant investors seeking green cards through the EB-5 program; money laundering for using a loan collateralized with investor funds to pay a personal tax obligation; and concealing material facts in a matter within the jurisdiction of a federal agency, namely United States Citizenship and Immigration Services (USCIS), which oversaw the EB-5 process.
According to court records and proceedings, the AnC Vermont project was designed to raise $110 million from 220 immigrant investors in order to construct and operate a biotechnology facility in Newport, Vermont. From 2012 to 2016, the defendants convinced approximately 169 investors to invest approximately $85 million in the AnC Vermont project, in addition to paying approximately $8 million in “administrative fees.” The facility was never constructed. As Chief Judge Crawford observed during Stenger’s sentencing hearing, in reality the AnC Vermont project was a “ghost.”
When Quiros pleaded guilty, he admitted that he and his co-conspirators misled AnC investors about important information, including how investor money would be used, the timing of job creation for the project, and Choi’s role in the project. For example, Quiros knew that investors were given a use-of-funds chart that contained a number of misrepresentations about the amount of funds Quiros and Choi planned to receive. Moreover, as the defendants raised investor money, Quiros used investor funds for purposes unrelated to the project, and he participated in concealing this misuse of funds. Quiros further admitted that the scheme included misrepresentations about the timing of the jobs that would be created by the project and the business revenue that would be generated from the project.
In addition to the wire fraud conspiracy charges, Quiros admitted using AnC investor funds for personal expenses, specifically a $6 million payment to the IRS in early 2015 funded by a loan collateralized by investor funds. Quiros also admitted helping to conceal from the Vermont Regional Center that Choi, who was deeply involved in the project, was being investigated in Korea for financial crimes.
As part of his plea agreement, Quiros agreed to cooperate in the government’s ongoing matters related to this case. The plea agreement signed by Quiros and the government capped Quiros’s potential jail sentence at 97 months, so long as he abided by the terms of the agreement. In connection with Quiros’s sentencing proceeding, the government informed the Court that Quiros should receive significant credit for his cooperation and would be an important witness at any trial of his co-defendants.
Quiros’s sentencing concludes the criminal proceedings for all three of the defendants who have appeared in this matter. Co-defendants Stenger and Kelly were each sentenced to 18 months’ imprisonment by Chief Judge Crawford earlier this month. Co-defendant Choi remains at large.
U.S. Attorney Nikolas P. Kerest expressed his continued gratitude for the outstanding investigation by the Federal Bureau of Investigation, IRS Criminal Investigation, and the FDA Office of Criminal Investigations in this case. U.S. Attorney Kerest also thanked the Justice Department’s Fraud Section and the Office of International Affairs for their invaluable collaboration in this prosecution.
“The Jay Peak EB-5 fraud was massive, lengthy, and wide-ranging. The defendants’ scheme impacted the lives of many hundreds of individuals, including not only investors from all over the world who dreamed of one day becoming United States citizens, but also Vermonters in Northeast Kingdom communities who hoped for the economic development and new jobs that the defendants promised to deliver,” said U.S. Attorney Kerest. “The conclusion of the criminal cases against Ariel Quiros, William Kelly, and William Stenger demonstrates that the U.S. Attorney’s Office is committed to addressing the most challenging cases and to rooting out fraud in all corners of Vermont. I commend our prosecutors and law enforcement partners for their dogged investigation and prosecution of this complex matter.”
"Ariel Quiros, William Kelly, and William Stenger knowingly took advantage of innocent EB-5 investors," said Janeen DiGuiseppi, Special Agent in Charge of the FBI's Albany Division. "Their deceptive scheme destroyed their plans and ruined the promise of economic development in the city of Newport and the Northeast Kingdom. This sentence should send a message that the FBI takes our responsibility to investigate and pursue those who commit fraud for personal gain very seriously. We will continue to work with our law enforcement partners to hold accountable those who use illegal means to take advantage of others."
“EB-5 investors contribute significant resources to American businesses and the U.S. economy with the aim of preserving jobs and seeking a pathway for obtaining lawful permanent residency,” said Joleen D. Simpson, Special Agent in Charge, IRS Criminal Investigation, Boston Field Office. “IRS Criminal Investigation is proud to bring our forensic accounting expertise in this multiagency effort to help ensure the integrity of this program and bring to justice those seeking to defraud it.”
“The U.S. public relies on FDA oversight to ensure that their medical products are safe and effective,” said Acting Special Agent in Charge Ronne G. Malham, FDA Office of Criminal Investigations New York Field Office. “We will continue to investigate and bring to justice companies that attempt to subvert the regulatory functions of the FDA, which are intended to protect the public health. We commend the efforts of the Department of Justice for their vigorous pursuit of justice in this matter.”
The prosecutors handling the case are Assistant U.S. Attorneys Paul Van de Graaf and Nicole Cate. Ariel Quiros is represented by Neil Taylor, Esq. and Robert Katims, Esq. William Kelly was represented by Robert Goldstein, Esq. and Mary Kehoe, Esq. William Stenger was represented by Brooks McArthur, Esq. and David Williams, Esq.