Burke Investors See Partial Payout, But Losses and Questions Linger in Vermont’s Largest Fraud Scandal
While a recent payout returns 36% to defrauded foreign investors, it highlights a massive financial loss, unequal outcomes, and the deep failure of state oversight in the Northeast Kingdom’s EB-5 saga
More than 120 foreign investors who poured their life savings and hopes for American residency into the Burke Mountain ski resort are finally seeing some of their money back, more than a decade after falling victim to Vermont’s largest-ever financial fraud. However, the approved payout of $183,322 to each investor represents only about 36% of their original $500,000 investment, cementing a staggering collective loss of over $38 million and leaving critical questions about how the state allowed the scandal to unfold.
According to federal court filings, Michael Goldberg, the court-appointed receiver, received approval to distribute approximately $22 million. This sum is a combination of the recent $11.5 million sale of Burke Mountain and roughly $10 million allocated from a larger $150 million settlement with the financial firm Raymond James, which handled accounts for the project’s developers.
While the distribution marks a milestone in the long-running receivership, it lays bare the devastating financial and personal consequences of the fraud. For the investors, the issue was never just about money; it was about a promised future in the United States.
The Human Cost: A Broken American Dream of Immigration
The investors participated in the federal EB-5 visa program, which offers a path to permanent U.S. residency, or a green card, to foreign nationals who invest a significant amount of capital (at the time, $500,000) into a U.S. business that creates a required number of jobs.
The developers of the Northeast Kingdom projects, Ariel Quiros and Bill Stenger, used this program to raise hundreds of millions of dollars for massive upgrades at Jay Peak and Burke Mountain, as well as other unfulfilled projects. When federal regulators stepped in in 2016, they described the eight-project, nine-year scheme as “Ponzi-like,” accusing the developers of misusing $200 million and systematically defrauding investors.
For the 121 Burke investors, the fraud not only meant a massive financial loss but also threw their immigration status into chaos. With the project failing to meet the job creation requirements stipulated by the EB-5 program, their path to a green card was severed. In a positive development, the Vermont Attorney General’s office has recently encouraged Burke investors to use a sworn affidavit from Michael Pieciak, the former commissioner of the Vermont Department of Financial Regulation who helped uncover the fraud, to support their applications for permanent residency, as reported by VermontBiz. This provides a glimmer of hope on the immigration front, but it doesn’t erase years of uncertainty and distress.
A Tale of Two Mountains: A System of Unequal Outcomes
The 36% recovery for Burke investors stands in stark contrast to the outcome for many investors in the Jay Peak projects. While Burke investors were left to rely solely on the proceeds from the resort’s sale and the Raymond James settlement, hundreds of Jay Peak investors benefited from an additional source of funds: the State of Vermont.
In 2023, the state agreed to a $16.5 million settlement with a class of Jay Peak investors. This settlement was a tacit admission of the state’s significant failure in its oversight role. This additional funding, combined with other recovered assets, meant that many Jay Peak investors were made financially whole or came much closer to a full recovery. Burke investors were not included in this state settlement, creating a clear disparity in outcomes between two groups of people defrauded in the same overarching scheme.
The Watchdog that Didn’t Bark: Vermont’s Failed Oversight
A critical piece of context often missing from the story is the role the State of Vermont itself played in the scandal. The EB-5 projects in the Northeast Kingdom were promoted and supposedly overseen by the state-run Vermont EB-5 Regional Center. However, this created a fundamental conflict of interest, as the same state agency was responsible for both marketing the projects to attract investors and regulating them to ensure compliance.
According to a 2024 analysis by VermontBiz, this dual role led to a “pattern of misplaced trust, unfortunate decision-making, lengthy delays, and missed opportunities to prevent or minimize fraud.” State officials, eager for economic development in the state’s most impoverished region, acted more as partners and promoters than as skeptical regulators. The federal Securities and Exchange Commission (SEC) eventually took the extraordinary step of shutting down the state’s regional center, citing its failure to properly monitor the projects and protect investors. This failure of oversight is what ultimately led to the state’s $16.5 million settlement with Jay Peak investors, though it offered no such relief to those who invested in Burke.
Justice and the Future of Burke Mountain
The masterminds of the fraud did face criminal consequences. Ariel Quiros, the former owner of both resorts, was sentenced to 60 months in prison. His partner, former Jay Peak CEO Bill Stenger, and a key advisor, William Kelly, also received prison sentences. However, according to the U.S. Department of Justice, their convictions were specifically tied to the AnC Bio project, a proposed biomedical research facility in Newport that was a complete fabrication and never built. The widespread misuse of funds at the ski resorts themselves did not lead to further criminal convictions.
With the legal proceedings largely concluded, Burke Mountain is now looking toward the future. The new owner, Bear Den Partners LLC, has committed to significant investments in the ski area. According to Snow Industry News, their plans include major upgrades to snowmaking infrastructure, lifts, and the lodge, signaling a new chapter for the resort and the local community that depends on it.
What Vermonters Should Understand
For Vermonters, the Burke Mountain saga is more than a complex financial story; it’s a cautionary tale with profound lessons. It reveals the potential dangers of entrusting economic development to programs with inherent conflicts of interest and inadequate oversight. The state’s eagerness to bring jobs to the Northeast Kingdom overshadowed its fundamental duty to protect the public and the investors it was supposed to be supervising.
The unequal outcomes between Jay Peak and Burke investors raise important questions about fairness and accountability. Why did one group of victims have access to a state-funded settlement while another did not?
Ultimately, the story of the Burke Mountain investors is a stark reminder that behind every major development project and every headline about financial fraud, there are real people whose lives and futures are at stake. As Vermont moves forward, the challenge is to learn from these failures, to demand transparency and robust oversight in all economic development initiatives, and to ensure that the promise of prosperity is never again built on a foundation of deceit.