Bill Stenger, one of two partners in an alleged fraud of foreign investors in Northeast Kingdom development projects, has settled with the federal Securities and Exchange Commission, according to court documents.
Stenger, the former president of the Jay Peak resort, did not admit or deny any wrongdoing. Documents filed in federal court in Miami say he will cooperate with the SEC.
Stenger and his business partner, Ariel Quiros, were charged in federal and state court in April of misappropriating $200 million from investors who participated in the federal EB-5 program. The federal fraud case continues against Quiros.
Under the EB-5 program, investors who put in a minimum $500,000 can get a fast track to legal residency in the U.S. if their investments generate jobs.
Michael Pieciak, the commissioner of the state Department of Financial regulation, has worked closely with federal investigators. He says the SEC settlement is "bifurcated" -- meaning it's split into two parts. The first part bars Stenger for life from participating in or soliciting investors for EB-5 projects.
"The second component of it is the financial component and whether or not he will face financial penalties, which will be determined by the court after the litigation has run its course," Piecak said.
Stenger's cooperation with the federal government will play a role as any penalties are assessed.
"Mr. Stenger's level of cooperation and other factors will go into that determination by the federal judge," Pieciak said.
The state is still pursuing a case against Stenger. "And we did not partner with the SEC on this settlement. And our civil case is still being actively litigated," he said.
Stenger said in an emailed statement to media that the settlement "sets up a framework to fully resolve the case the SEC filed against me."
He said he will continue to work with a federal receiver who is now in control of Jay Peak and Burke Mountain resorts in the Northeast Kingdom.
"Based on the terms of the settlement, this is all I can say and will be saying. I ask that you please respect that I will not be making any more public statements about the settlement nor about the case," he wrote. "I want to focus my efforts fully to assist the receiver and to help the investors."
Update 4:29 p.m. Story updated to include comments from Michael Pieciak, commissioner of the state Department of Financial Regulation.
Update 11:47 a.m. Story updated to include Stenger's statement.