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Date: 08-22-2020

Case Style:

United States of America v. Ariel Quiros

Case Number: 5:19-cr-00076-gwc

Judge: Geoffrey W. Crawford

Court: United States District Court for the District of Vermont (Rutland County)

Plaintiff's Attorney: United States District Attorney’s Office

Defendant's Attorney:


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Description:





Rutland, VT - The United States of America charged Ariel Quiros, age 64, with fraud.

Quiros pleaded guilty to 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. He also pleaded guilty to money laundering and to 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.

During the plea hearing, Quiros admitted to a lengthy statement of facts. That factual statement was appended to the written plea agreement filed with the Court last week. In sum, Quiros admitted participating in a scheme conceived in 2011 and carried through until he lost control of the project in April 2016. The AnC Vermont project, managed by Quiros and Stenger, was designed to raise $110 million from 220 immigrant investors in order to build and operate a biotechnology company on a property in Newport. From 2012 to 2016, Quiros and his co-defendants obtained approximately $85 million, plus approximately $8 million in “administrative fees", from approximately 169 immigrant investors in the AnC project. Under the EB-5 program created by Congress, immigrant investors could obtain lawful permanent residency (green cards) by investing $500,000 each in a United States business that would create ten jobs per investment. Pursuant to federal law, the AnC project was regulated and monitored by USCIS and the Vermont Regional Center, a part of state government.

Quiros admitted that the scheme involved misleading 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, including the payoff of a loan at Raymond James and as collateral for a separate loan at Citibank. Quiros also acknowledged that 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. Marketing the project to immigrant investors depended on job creation and future revenue, since the defendants emphasized their ability to satisfy the job creation standards under EB-5 law and repay immigrant investors. Quiros understood that his co-defendants devised job and revenue projections based on the number of jobs needed to obtain project approval from USCIS, and Quiros did not inquire whether they had a viable plan to actually create those jobs or achieve those revenues. AnC Vermont would supposedly rent clean rooms, market stem cell therapies, and manufacture artificial organs. Quiros admitted that investors were deceived in regard to all three facets of the future business.

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 the Citibank loan described above. In addition, Quiros helped conceal from the Vermont Regional Center that Choi, who was deeply involved in the project, was being investigated in Korea for financial crimes.

In the plea agreement, Quiros agreed to cooperate in the government’s ongoing matters. The plea agreement caps Quiros’s jail sentence at 97 months, so long as he abides by the terms of the agreement. The government agreed that it would not recommend a fine or forfeiture, but instead focus on seeking a restitution order for victims. The government requested that the Court delay Quiros’s sentencing pending his ongoing cooperation.

Co-defendants Kelly and Stenger have entered not guilty pleas to the pending charges, which are only allegations. These defendants are presumed to be innocent unless and until proven guilty beyond a reasonable doubt in a court of law. The Court has scheduled their trial for 2021. Co-defendant Choi remains at large.

United States Attorney Christina E. Nolan expresses her ongoing gratitude for the outstanding investigation assistance by the Federal Bureau of Investigation, the Criminal Investigation Division of the Internal Revenue Service, the Food and Drug Administration, and for the assistance of the Justice Department’s Fraud Section and Office of International Affairs. The prosecutors handling the case are Assistant U.S. Attorneys Nicole Cate and Paul Van de Graaf and Trial Attorney Jessee Alexander-Hoeppner, from the Department of Justice Criminal Division. Ariel Quiros is represented by Neil Taylor, Esq. and Robert Katims, Esq. William Kelly is represented by Robert Goldstein, Esq. and Mary Kehoe, Esq. William Stenger is represented by Brooks MacArthur, Esq. and David Williams, Esq.

18:1349.F ATTEMPT AND CONSPIRACY TO COMMIT FRAUD - knowingly conspired to devise a scheme to defraud investors in the AnC Vermont EB-5 project through interstate and foreign wire communications including the state of Vermont
(1)
18:1343, 2.F FRAUD BY WIRE, RADIO, OR TELEVISION - devised the scheme to defraud and obtain money fraudulently transmitted by wire communication an email with subject line "Jay Peak Biomedical Research Park LP General Partner's Authorizations for Payment"
(2)
18:1343, 2.F FRAUD BY WIRE, RADIO, OR TELEVISION - devised the scheme to defraud and obtain money fraudulently transmitted by wire communication an email with subject line "What should be the final workbook attached"
(3)
18:1343, 2.F FRAUD BY WIRE, RADIO, OR TELEVISION - devised the scheme to defraud and obtain money fraudulently transmitted by wire communication an email with subject line "FW: ACCD Ltr to Kelly"
(4)
18:1343, 2.F FRAUD BY WIRE, RADIO, OR TELEVISION - devised the scheme to defraud and obtain money fraudulently transmitted by wire communication an email with subject line "FW: Revised Spreadsheet"
(5)
18:1343, 2.F FRAUD BY WIRE, RADIO, OR TELEVISION - devised the scheme to defraud and obtain money fraudulently transmitted by wire communication an email with subject line "Letter to the Malek Brothers"
(6)
18:1343, 2.F FRAUD BY WIRE, RADIO, OR TELEVISION - devised the scheme to defraud and obtain money fraudulently transmitted by wire communication an email with subject line "FW: $980,000 wire transfer from $ Citibank"
(7)
18:1957, 2.F ENGAGING IN MONETARY TRANSACTIONS - knowingly engaged in a monetary transaction in criminally derived property of value greater than $10,000, namely a check payable to the Internal Revenue Service
(8)
18:1957, 2.F ENGAGING IN MONETARY TRANSACTIONS - knowingly engaged in a monetary transaction in criminally derived property of value greater than $10,000, namely a check to purchase a Jeep Rubicon
(9)
18:1001, 2.F STATEMENTS OR ENTRIES GENERALLY- knowingly concealed a material fact in a matter within the jurisdiction of the Executive Branch of the United States re: AnC Vermont investor funds
(10)
18:1001, 2.F STATEMENTS OR ENTRIES GENERALLY- knowingly concealed a material fact in a matter within the jurisdiction of the Executive Branch of the United States re: investigation for financial crimes
(11)
18:1001, 2.F STATEMENTS OR ENTRIES GENERALLY- knowingly made a materially false statement in a matter within the jurisdiction of the Executive Branch of the United States re: AnC Korea financial matters
(12)

Outcome: 08/20/2020 191 TRANSCRIPT of Motion hearing as to Ariel Quiros held on 5/8/2020 before Judge Geoffrey W. Crawford. Court Reporter/Transcriber Anne Henry, telephone number 802-747-9193. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 9/14/2020. Redacted Transcript Deadline set for 9/24/2020. Release of Transcript Restriction set for 11/23/2020. (pjl) (Entered: 08/20/2020)
08/20/2020 192 TRANSCRIPT of Status Conference and Motion hearing as to Ariel Quiros, William Kelly, William Stenger held on 7/10/2020 before Judge Geoffrey W. Crawford. Court Reporter/Transcriber Anne Henry, telephone number 802-747-9193. Transcript may be viewed at the court public terminal or purchased through the Court Reporter/Transcriber before the deadline for Release of Transcript Restriction. After that date it may be obtained through PACER. Redaction Request due 9/14/2020. Redacted Transcript Deadline set for 9/24/2020. Release of Transcript Restriction set for 11/23/2020. (pjl) (Entered: 08/20/2020)

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