EB-5 Makes the New Yorker — But the Focus Is on One of the Swindlers, Not the Program's Flaws

By David North on February 5, 2024

The New Yorker has finally noticed the EB-5 program and its most prominent scandal, that of the Jay Peak ski resort in northern Vermont. But the article’s focus is on Bill Stenger, the jailed if lesser villain in the piece (because he was willing to talk to the writer), rather than on the obvious dangers of the underlying program.

Virtually none of the other Jay Peak players were willing to talk to the author, New Yorker staff writer Sheelah Kolhatkar, a byline new to me, a life-long reader of the magazine. So the writer quotes Stenger at length and he is a good talker. The major villain in the piece, now in jail, Ariel Quiros, gets a different, less favorable, and totally appropriate treatment:

Stenger’s son, Andrew, the facilities director at Jay Peak, said that he distrusted Quiros and his associates “from the get go.” A former state official told me “I left our first meeting with him feeling like I needed to take a shower.” ... [Another person] said that Quiros was “the guy central casting would send you to play a dodgy character.”

I suppose my basic reaction to the article is the sense that the writer feels EB-5 is a good program and that, in this case, now eight years in the making, it went wrong in an interesting manner. My take has been that this is a totally needless program in which acts of corruption are all too frequent, as I have reported in the past here and here.

The author barely mentions the fact that aliens, unable to come to the U.S. under other provisions of the immigration law, can buy their way into citizenship (though this failed in many Jay Peak instances). Similarly, there is little said about other EB-5 schemes to defraud alien investors, but there are mentions of the gerrymandered maps linking project locations to depressed areas that used to dominate the program.

The article seems largely correct factually, with two exceptions. The current minimum investment an alien can make to get the family set of visas through it is $800,000 not the $900,000 cited. Also, I have an impression that Raymond James is a brokerage house, not a bank, as described in the piece. That outfit paid multi-millions to get out from under its participation in the scheme, perhaps more than it needed to. I wish some writer would get to the bottom of that aspect of the case.

Memories. My only contact with Stenger came years and years ago when we were both expert witnesses at the last U.S. Senate hearing on the question of extending a key piece of the EB-5 program, the use of DHS-licensed regional centers to pool and manage the investors’ money, as was being done in Vermont.

Stenger, then a good buddy with then-Sen. Pat Leahy (D-Vt.), was the senator’s witness in favor of the program; I was the skeptical witness for the other side and was recruited by Sen. Chuck Grassley (R-Iowa). Leahy and Grassley, many years (and Jay Peak) later, successfully worked to make the program less open to fraud.