Stenger reports to federal prison to start 18-month sentence

Bill Stenger, Jay Peak’s former CEO and president, reported Tuesday to a federal prison in Massachusetts, the first of three business partners charged, convicted and sentenced in the largest fraud case in the state’s history to go behind bars.

Stenger, 73, has been given the prison registration number 12519-082.

At his sentencing hearing in April, Stenger requested that he serve his term at Federal Medical Center Devens, a prison in Ayer, Massachusetts, a little over 200 miles from his home near the Canadian border in Newport. With credit for good time, Stenger will need to serve about 15 months before being eligible for release. 

The sentence is far shorter than the five years prosecutors had been seeking, but more than the home detention his defense attorneys had sought. According to the federal Bureau of Prisons website, the facility sometimes known as Fort Devens serves as a medical center with an adjacent “minimum security satellite camp.”

Stenger’s attorneys had requested Devens because it’s one of the closest federal facilities to Newport. In handing down his sentence, Judge Geoffrey Crawford said he weighed health problems raised by Stenger’s attorneys, although the judge noted they were not life-threatening.

Ariel Quiros, Jay Peak’s former owner, and William Kelly, a key adviser to Quiros, are both set to begin their prison sentences later this summer. The three men were convicted on charges stemming from their roles in the massive EB-5 fraud case.

Crawford sentenced Quiros to five years behind bars and Kelly to 18 months, the same amount of prison time as Stenger.

Though Crawford called Stenger the public face of the fraud scheme that involved hundreds of millions of dollars, Stenger’s attorneys have been quick to point out that their client did not financially benefit from the illegal conduct. However, prosecutors have countered that Stenger could have cashed out for millions down the road. 

Stenger pleaded guilty to submitting a false document to the government regarding a proposed biomedical research center project. As part of a plea deal, prosecutors dismissed fraud charges that had initially been leveled against Stenger. 

Prosecutors asked the judge to order Stenger to pay $1.66 million in restitution to defrauded investors, but the judge eventually set the figure at $250,000.

As with other people incarcerated at Devens, Stenger will be required to live a regimented life. He’ll have to wake up at 6 a.m. and wear a uniform that includes khaki or green trousers and a shirt.

“The shirt will be tucked neatly into the trousers and buttoned, except the top button may be unbuttoned,” the handbook added. “The sleeves may be rolled neatly to the elbow, or worn all the way down and buttoned.” 

Quiros is expected to begin serving his prison sentence July 27 and Kelly on Aug. 8. 

Stenger, Quiros and Kelly were indicted on federal charges in May 2019 related to a failed $110 million project to build a biomedical research facility in Newport, later termed by regulators “nearly a complete fraud.” 

According to his plea deal, Stenger “knowingly and willfully” submitted a document to the government on Jan. 9, 2015, containing false statements related to the proposed AnC Bio Vermont’s sales projections and business plan.

Though more than $80 million was raised from 160-plus foreign investors seeking permanent U.S. residency through their investments, little work was done to make the project a reality.

The investors invested their money through the federal EB-5 program, which allows them to receive green cards for U.S. residency if they invest at least $500,000 in a qualified project. If that project creates the required number of U.S. jobs, that investor then becomes eligible to be a permanent U.S. resident.

The AnC Bio project was part of a series of developments in the Northeast Kingdom — including at Jay Peak and Burke Mountain Resort — Quiros and Stenger financed through the EB-5 program over more than a decade.

The U.S. Securities and Exchange Commission accused the two men of misusing more than $200 million of the more than $400 million they raised for their projects over the years from EB-5 investors. 

Regulators also alleged that Quiros had siphoned off more than $50 million for his own personal use, including paying off a large tax bill and buying a luxury condo in New York City.

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