foreign investors suing the state<\/a>.<\/p>\nAfter listening to arguments from Barr on Tuesday in federal court in Burlington about why the documents should be turned over to him and his clients, Crawford said he was willing to do just that, provided federal prosecutors had no earlier agreements with those witnesses to keep them off-limits.<\/p>\n
Assistant U.S. Attorney Paul Van de Graaf said during the hearing that he did not believe that such agreements existed, though he needed to double-check before saying so definitively.<\/p>\n
Barr sought those records from the legal team representing Bill Stenger, Jay Peak\u2019s former CEO and president, in a criminal case brought in connection with a failed $110 million project to build a biomedical research facility in Newport.\u00a0<\/p>\n
Barr, on behalf of foreign EB-5 investors, filed a civil lawsuit in 2017 against the state of Vermont and state officials and employees responsible for the oversight and monitoring of a series of EB-5-financed projects headed by Ariel Quiros, Jay Peak\u2019s former owner, and Stenger, including the AnC Bio development in Newport.\u00a0<\/p>\n
Should Crawford reverse his earlier ruling, it would send Barr back to state court, where his lawsuit against the state is pending. However, the protective order in the federal criminal case would no longer be a barrier preventing those FBI statements from being turned over to Barr.<\/p>\n
Assistant Attorney General David Groff, who is representing the state in that civil lawsuit, said during Tuesday\u2019s hearing that he agreed that the release of the FBI statements by state employees and officials was a matter for the state court.<\/p>\n
Barr told Crawford on Tuesday that for \u201cnearly half a decade\u201d he had been seeking discovery materials from the Vermont attorney general\u2019s office through his state civil lawsuit but often ran into roadblocks.<\/p>\n
Groff said the attorney general\u2019s office has already provided about 50,000 documents to Barr in that case on a rolling basis. Groff said his office still would need to review if there were any other reasons that the documents related to the FBI statements should remain secret.<\/p>\n
As the hearing drew to a close, Crawford struck an optimistic tone in the legal dispute that had become increasingly heated in recent filings.\u00a0<\/p>\n
\u201cWe whittled down the divide quite a bit,\u201d the judge said.<\/p>\n
Stenger, Quiros and William Kelly, a key adviser to Quiros, have all pleaded guilty to federal crimes in connection with the collapsed project they headed to build the biomedical research facility in Newport known as AnC Bio Vermont.<\/p>\n
All three are now awaiting sentencing expected to take place early next year.<\/p>\n
Despite raising more than $80 million from more than 160 foreign investors seeking permanent U.S. residency through the federal EB-5 visa program, the AnC Bio Vermont project barely got started.\u00a0<\/p>\n
The failure crushed investors\u2019 hopes of legally living in the United States and left them out at least $500,000 each, which they had put into the development that was later termed by federal regulators \u201cnearly a complete fraud.\u201d\u00a0<\/p>\n
Barr, on behalf of foreign EB-5 investors, claims the state and the administration of then-Gov. Shumlin not only failed to prevent the developers from committing fraud, but also perpetuated the fraud by allowing investors to continue to pour money into projects while knowing that the fraud was occurring.<\/p>\n
The Vermont attorney general\u2019s office, representing the state in that lawsuit, has battled to prevent Barr from getting documents that he claims can prove the state\u2019s culpability in the fraud.<\/p>\n
Recently, Barr, through a subpoena from the state lawsuit, sought to get those documents from Stenger\u2019s legal team, which had received them from federal prosecutors as part of the criminal case against their client.\u00a0\u00a0\u00a0\u00a0<\/p>\n
The Tuesday hearing kicked off with Van de Graaf stating that the federal prosecutors had sought a \u201cblanket\u201d protective order to facilitate the process of turning over the more than 3 million pages of discovery materials to Stenger\u2019s defense team.\u00a0<\/p>\n
Rather than going over each document to make a case-by-case decision on which document or piece of information should remain confidential, Van de Graaf said the \u201cblanket\u201d agreement with Stenger\u2019s defense team streamlined that process.<\/p>\n
The protective agreement he had reached with Stenger\u2019s lawyers prevented them from providing copies of the material to other parties, including the press.<\/p>\n
But, Van de Graaf said Tuesday, he later learned that Stenger\u2019s attorneys had allowed others to view the documents, including Barr.<\/p>\n
Brooks McArthur, one of Stenger\u2019s lawyers, said during the hearing that the defense team had shown documents to witnesses and others to verify the statements contained in them.<\/p>\n
\u201cWe complied with the letter of the protective order,\u201d McArthur said.\u00a0<\/p>\n
That protective agreement with the federal prosecutors was later amended to prevent the defense team from showing those documents to third parties.\u00a0<\/p>\n
Barr said at the hearing that he saw about a handful of the FBI statements, and it made him realize that he was not getting all the material he wanted from the Vermont attorney general\u2019s office.<\/p>\n
Crawford, at one point, asked Barr why he did not act earlier to interject himself into the federal criminal case. The judge referred to a status conference that was held in Stenger\u2019s criminal case just days before Barr obtained the subpoena seeking the documents and wondered why Barr did not raise his concerns over access to records at that point.<\/p>\n
\u201cIt would have been a ticket to the dance,\u201d Crawford said.\u00a0<\/p>\n
Barr said Van de Graaf told him the documents and information would come out during Stenger\u2019s trial or at a later hearing that had been set after Stenger entered a plea deal. At that hearing, the extent of Stenger\u2019s culpability in the fraud was to be at issue, with high-ranking state officials and employees expected to testify.<\/p>\n
However, that hearing eventually was nixed.<\/p>\n
Barr, in the hearing Tuesday, contended that federal prosecutors lacked any good cause to keep the FBI statements and other materials they provided to Stenger\u2019s team hidden.<\/p>\n
Barr said keeping those documents secret only added to the harm to the foreign investors as they seek justice through the state lawsuit.\u00a0\u00a0\u00a0<\/p>\n
Van de Graaf countered that the legal standard for determining good cause is not cast in stone.<\/p>\n
\u201cThe metrics for \u2018good cause\u2019 are a flexible concept,\u201d he said.\u00a0<\/p>\n
The prosecutor added that Barr should have filed to intervene in the federal case before pressing ahead with seeking to obtain the documents from Stenger\u2019s defense team.\u00a0<\/p>\n
\u201cRight now,\u201d Van de Graaf said, \u201cthe Barr firm is not a party to this case.\u201d\u00a0<\/p>\n
Van de Graaf said the criminal investigation included about 220 interviews, with about 20 of those involving current or former state officials or employees.<\/p>\n
Interviews with state witnesses, the prosecutor said, were later provided to the Vermont attorney general\u2019s office. And, he said, since the protective agreement is between the federal government and Stenger\u2019s defense team, those witness statements fall outside of it.<\/p>\n
Crawford said that could create a \u201ccarve out\u201d for those documents from the protective agreement that he endorsed last month at the federal prosecutor\u2019s request.<\/p>\n
The judge gave Van de Graaf until the end of January to file a written brief informing him if the prosecution had any other agreements with those witnesses that could prevent their statements from being released.\u00a0<\/p>\n
Barr, in an email after the hearing late Tuesday afternoon, said he was optimistic that he would be able to obtain the FBI statements in the state court case.<\/p>\n
\u201cWe see today\u2019s court hearing as progress for the defrauded investors to get to the truth of this massive fraud,\u201d he wrote.<\/p>\n
Barr added that he also learned at Tuesday\u2019s hearing about the federal prosecutor sharing the FBI interview statements of state officials with the Vermont attorney general\u2019s office.<\/p>\n
\u201cThere is now no reasonable basis to withhold this evidence from the victims,\u201d Barr wrote.<\/p>\n\n
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