EB-5 Investor Lawsuit Against Vermont State Officials Dismissed

Apr 20, 2018

A Vermont judge has dismissed a lawsuit against the state officials who oversaw allegedly fraudulent EB-5 projects in the Northeast Kingdom. 

A group of foreign investors filed a civil suit last year against officials at the Agency of Commerce and Community Development and the Department of Financial Regulation, alleging they were negligent in their oversight duties. But Lamoille County Judge Thomas Carlson ruled on Friday that they don’t have a case.

Carlson said in his ruling that employees at the Agency of Commerce were acting within their discretionary authority as government officials, while overseeing the ill-fated EB-5 ventures. And he said the plaintiffs did not provide evidence of the negligence, fraud and breach of contract they were alleging.

In 2016, the Securities and Exchange Commission accused Ariel Quiros of using the federal EB-5 program to orchestrate a massive Ponzi scheme against the foreigners who invested $500,000 a piece in his projects. Quiros has since settled with the SEC for more than $80 million.