Vermont’s Scandal of the Century

The inside story of how the founder of a fledgling news site uncovered Vermont’s biggest scandal.

Photo via Design Pics Inc./Alamy Stock Photo.

It was still dark that September morning in 2012 when I climbed into my car, pulled out of the driveway of my ramshackle farmhouse in Hardwick, Vermont, and headed north toward the Canadian border. Bill Stenger, the beloved president and CEO of Jay Peak Resort, who had converted the once rundown mountain into one of New England’s finest skiing destinations, was holding a three-day press extravaganza in three towns—Burke, Jay, and Newport—in the Northeast Kingdom. The entire congressional delegation, plus Governor Peter Shumlin and officials from the state commerce agency, would be there.

As a veteran journalist, I took a dim view of press conferences. Corporations and politicians use the events to spin newbies, spoon-feed lazy reporters, and railroad more experienced ones. After 15 years on the job, I’d developed a knack for disassembling carefully constructed PR narratives. With all the political glitterati that promised to be there, I had a feeling this one was not to be missed.

As I drove north on winding two-lane roads, the sun rose over some of the most pristine farmland and forest in the state. The Northeast Kingdom was in its fall glory, with vibrant orange, red, and gold maple leaves popping against a robin’s-egg-blue sky. Still, the beauty belied the desperate economy of the region, home of the state’s highest unemployment rate. Farms stood abandoned. A pair of once prosperous factories had closed: a plywood plant and the Bogner ski clothing manufacturer. Storefronts in the major towns sat empty. Most of the 19th-century Cape houses dotting the landscape featured peeling white paint, while junk cars used for parts ornamented countless lawns.

When I arrived at the mountain, resort staff ushered me into the back of a windowless conference room with the other reporters. I’m a small person, but I had a hard time squeezing in with just a notebook and recorder in hand. Some 200 people had packed into the room—politicians, business leaders, onlookers, and town officials—and the place was abuzz with speculation: What is Bill Stenger up to now?

Stenger, wearing his typical blue blazer, walked toward the podium and addressed the crowd in a mumble. Then he stretched out his arms as though he was about to embrace the crowd and rattled off his accomplishments. In just three years, Stenger said, he and his partner, Miami businessman Ariel Quiros, had raised $250 million from foreign investors and used it to transform the resort with a new five-story hotel that included a 60,000-square-foot waterpark, luxury suites, and conference rooms. Stenger explained that his plans for the resort also included two additional hotels and three more condo complexes.

Still, there was more. Stenger’s plans went beyond Jay Peak and even nearby Burke Mountain, which he and Quiros acquired and were planning to overhaul. In front of the press corps, Stenger whipped out a red laser-pointer and clicked through a PowerPoint presentation outlining his intention to bring 10,000 year-round jobs to the region. His plan included an office complex, marina, and conference center in rural Newport; a new terminal at the tiny Coventry airport; a window-manufacturing plant; and an athletic training center. But the crown jewel was the outpost of the South Korean biotech firm AnC Bio that they were planning to bring to Vermont. Stenger’s anticipated $110 million state-of-the-art biomedical facility would replace the shuttered Bogner plant in Newport and manufacture stem-cell therapies, artificial organs, and dialysis machines. His plan was to reinvent the entire economy of the Northeast Kingdom using an additional $600 million from foreign investors. “This momentum is so good it is going to catapult us forward,” he told the crowd. It was, he declared, the biggest economic initiative Vermont had ever seen.

If there had ever been any doubt as to who the king of the Northeast Kingdom was, there wasn’t anymore. As I looked around the room, everyone from the mayor of Newport to the secretary of commerce was beaming. Later that afternoon in Newport, the excitement among the congressional delegation was palpable. U.S. Senators Patrick Leahy and Bernie Sanders, U.S. Representative Peter Welch, and Governor Shumlin each praised the plans to bring AnC Bio to the Green Mountain State.

I looked around at the other reporters to see if there was anyone who appeared as bewildered and skeptical as I was, but they, too, appeared to be swept up in the Stenger cult of personality. In the brief press scrum, the journalists lobbed softball questions. They didn’t seem curious to find out whether what Stenger had in store for the Northeast Kingdom was simply too good to be true.

I left the event and sped back to the office of VTDigger, the news site I run in Montpelier and had founded just three years earlier. My mind was racing the entire way. How was it possible to bring 10,000 jobs to a region where only 60,000 people lived? How could a low-margin enterprise such as a ski mountain make enough to pay back investors? The numbers didn’t seem to add up, not to mention the difficulty of recruiting scientists to run a biotech project in such a remote area of the country.

By the time I arrived in downtown Montpelier, I had one thing on my mind—and it wasn’t the story that I had to sit down to write. I bounded up the stairs to our office above a used-clothing store, took my seat at one of our World War II–era desks, and fired off a brief piece about what had been said at the press conference. Once that was out of the way, I got down to business. I wrote a three-page proposal to the Fund for Investigative Journalism, laying out the case that something was not adding up in Stenger’s grand vision and asking for money to pursue the story. Several months later, an email popped into my inbox informing me that I had won the grant. The chase was now officially afoot.

A massive indoor water park at the resort paid for with EB-5 visa investments. / Photo by Education Images/Boston Globe/Getty Images

Until the press conference that day, I hadn’t visited Jay Peak in several years. The mountain, at the northern end of the Green Mountain range, had always been a draw for serious skiers, but the amenities were lacking, to put it mildly. The signature hotel was a faux ’60s Tyrolean affair with interior barn siding that had become shabby and distinctly unchic. The rooms and bathrooms were dingy, and the last time I stayed there, I was horrified when my husband insisted on braving the green scum of the basement hot tub.

The transformation I witnessed as I pulled in for the press conference was staggering. In just six years, Stenger had taken Jay Peak from a seedy skiing destination to an upmarket family resort.

It was as though Stenger had a magic wand. And, in fact, one could argue he did. Starting in 2006, Stenger had tapped into what is known as the EB-5 foreign investment program as a source of funding. This federal program gave prospective immigrants to the United States an opportunity to obtain a green card in exchange for a $500,000 investment in projects like Stenger’s, so long as the project created 10 jobs for U.S. workers. In only two years, Stenger had attracted $25 million through this program, enough to begin construction on the Tram Haus Lodge, one of the three resort hotels he had envisioned.

That kind of magic was what local people expected of Stenger. White-haired and avuncular, he was beloved by many in the community, who credited him with keeping his corner of the Kingdom afloat economically. With 1,200 workers, Jay Peak was the largest employer in the region—followed by a state prison—and he spent millions on local vendor contracts.

Like so many others, I had only heard wonderful things about Stenger. For years, he and his wife, Mary Jane, had been magnanimous supporters of the Newport community and hosted band students in their home on the Lake Memphremagog waterfront for the annual Vermont All-State Music Festival. My daughter was one of those students in 2007, and she couldn’t say enough about the Stengers’ hospitality—and their gorgeous high-end fridge. Meanwhile, Stenger’s no-job-too-small management style—taking the garbage out, running the ski lift, and giving guests directions—engendered trust among staff, visitors, and locals alike.

When the owner of the mountain’s parent company, Mont Saint-Saveur International, died in 2006, Stenger saw an opportunity to truly become the king of the mountain. To buy it, though, he needed a partner with deep pockets. He turned to Ariel Quiros, a self-made Miami businessman who had acquired his fortune in the import-export business and real estate and who had vacationed over the years at Jay Peak.

Quiros bought the resort in June 2008 and installed Stenger as president and CEO. Then the two men went on a building binge, constructing the Tram Haus Lodge hotel in 2009 and starting the Hotel Jay in 2010. The pair continued to solicit tens of millions of dollars from foreign investors through the EB-5 program, eventually amassing $450 million. At the time, no one anywhere in the country had ever used more investor money from the EB-5 program than Stenger was planning to.

The already popular Jay Peak president and CEO was hailed in Vermont as nothing short of a hero. Headlines sung his praises. The Vermont Chamber of Commerce gave Stenger its Citizen of the Year award in 2011; Governor Shumlin showcased the Jay Peak projects in his inaugural address that year and in his state of the state speech a year later. Stenger was asked to give college commencement addresses and speeches to business groups. In the town hall of Newport, where Stenger planned many projects, a sign hung that read, “Thank You, Bill Stenger.”

At the same time Stenger’s developments and his reputation started taking off, my industry and career appeared to be crumbling. I was the Sunday editor at the Rutland Herald and Barre-Montpelier Times Argus, well-regarded independent sister newspapers that had shared a Pulitzer Prize for editorial writing. One cold January day in 2009, the managing editor called me into her office and handed me a letter stating that I’d been laid off as part of a cost-cutting initiative and that I was to leave immediately. Shocked, I grabbed a few personal items from my desk, said good-bye to colleagues, and drove off.

I was devastated. It had been my dream job. I loved the pressure of directing the coverage, working with reporters, and pulling the print newspaper off the press at 2 a.m. every Saturday night. There was nothing else in the world I wanted to do, and I was determined to find a way to keep doing it. I came up with an idea to start my own site dedicated to investigative reporting. When I told my friends about my idea, they told me I was crazy. I did it anyway.

I launched VTDigger at the end of August 2009, and by November, when I had only a few hundred readers, I realized I couldn’t keep the lights on solely with investigative stories. So in January 2010, I augmented the investigative reports with daily coverage of the Vermont legislature and started running commentaries and press releases. For more than two years, I was the site’s sole reporter. (I guess I was crazy after all.) I once covered a five-way Democratic primary for governor all alone. I worked hard and slept little, but the relationships I built in the State House over the years, spending every waking moment of my day inside that building, paid off when I started investigating one of the state’s biggest heroes and his EB-5–fueled empire.

Miami businessman Ariel Quiros bought Jay Peak in 2008. / Photo by Lisa Rathke/AP

In 2014, the July Fourth weekend was underway and government workers had all cleared out of their offices for the holiday when I stepped into the darkened lobby of a state office building in downtown Montpelier. Inside, an elected state official who had been promised anonymity handed me a stack of printed emails with the names and contact information for some 30 foreign investors in Jay Peak.

They had each put up half a million dollars and held shares in the Tram Haus Lodge hotel. A source had told me that investors had filed dozens of complaints with the state commerce agency outlining allegations that Stenger and Quiros had failed to pay back their original investments after five years, as promised, and had effectively seized the property right out from under the investors. No one had reported this so far. It was the first big sign that Stenger’s projects might not be as sound as they appeared.

I had been waiting for something like this to happen as I watched the fissures in Stenger’s plan slowly emerge. In 2012, Nicholas and Douglas Hulme, the men who helped Stenger recruit foreign investors to the visa program, severed ties with Stenger and Quiros and questioned their financial practices. Later that year, Stenger delayed so long on putting down a $1 million deposit required to buy a shopping plaza on Lake Memphremagog in Newport, where he planned to build a marina and conference center, that the owner called off the deal. All along, the state vigorously defended the EB-5 program and Stenger’s ambitious plans, assuring residents that everything was in order.

Armed with a fresh Rolodex of contacts given to me by my anonymous source, I sensed that I was on my way to proving what I’d long suspected: that Stenger and Quiros would not be able to pay back their foreign investors, who had ponied up a half a million dollars each in exchange for the American Dream. I spent the next few weeks badgering investors with requests for interviews via cellphone, email, and social media. No one wanted to talk.

Then one evening later that month, I was sitting on the porch eating supper with my family when my phone rang. I looked at the screen and noticed it was an international number. I took the call on the spot. On the other end of the line was a man with a thick East London accent by the name of Tony Sutton. He told me he was calling on behalf of 20 investors, including himself, who had been harmed by the Jay Peak deal. The group had decided they would trust me and give me the documents I needed to nail down the story. As I listened, I started trembling with excitement. When the call ended, I looked at my husband and son, seated with me at the dinner table, and said that I had been waiting two years for a break like this.

Soon, I received documents showing that Stenger and Quiros had dissolved the limited partnership with investors, seized ownership of the mountain property, and offered a nine-year balloon loan with the principal paid in the final year. Stenger and Quiros made these changes without notifying investors.

Everything Sutton told me checked out. By then, business was going well enough at VTDigger that I was able to hire a staff reporter, Hilary Niles. Niles got on the phone with officials from the office that oversaw all of the EB-5 investment projects in Vermont. They denied any knowledge of the arrangement and blamed investors for not paying enough attention to the “no guaranteed return of investment” language in the EB-5 contract.

Niles, who established a good relationship with Stenger, asked him if we could tour the Tram Haus Lodge, Hotel Jay, and other projects at the resort. I figured it was the best way to get Stenger on the record. When we arrived, the developer had dropped his aw-shucks routine and cautiously asked us if we wanted see the waterpark and the two hotels. We suggested that we’d like to interview him first. Stenger furrowed his brow and led us into the very same conference room where I attended the 2012 press event.

When we eventually raised investors’ complaints, Stenger told us that “every investor that got involved in the EB-5 program knows that there is no guarantee of any return, and no guarantee when they’ll get their investment back.” Jay Peak was making “a good-faith effort,” he said, to return the money and had agreed to complete payments to investors by 2018, still four years away. “That’s a pretty good outcome,” he insisted.

Still, the documents showed otherwise. Quiros and Stenger had made no requests for approval, let alone sent disclosures to investors when they dissolved the limited partnership the year before, in August 2013. Investors didn’t find out for another nine months that Quiros had taken shares in the hotel, moved their money out of escrow, and seized the property. And, according to those documents, the payback period was nine years away, not four, as Stenger was claiming.

Niles and I raced back to my house in Hardwick late that hot Friday July afternoon and pounded out a news story for our site. We sent a draft to our attorney, who made key changes, and then I fussed over the copy for hours, reading it two dozen times, double-checking every assertion against the documents and the interviews. Finally, we were ready to publish it on Sunday as the main story on the website.

It was the first time a journalist had cast doubt on the fairy-tale narrative of Stenger’s grand vision to rescue the Kingdom. I hit “send” and then braced myself.

Bill Stenger, the president and CEO of Jay Peak, who remade the shabby mountain into a resort. / Photo by Robin Smith/The Caledonian-Record/AP

I was in my office the Monday morning after the story ran when I heard someone coming up our stairs. I looked up to see Stenger storming into the entryway. Gone was the affable, soft-spoken man everyone knew and loved. His face was burning red. “You could have waited,” I recall him saying. “I told you I was going to give you this.” He waved the limited partnership agreement with investors in his right hand. He went on about the headline and the word choices, getting so upset that he began to tear up.

“Your story is inaccurate,” I remember he said.

“Can you point out what exactly in the story is inaccurate?” I asked. He could not.

We went back and forth like this several times, and when it was clear we had reached an impasse, he turned on his heels and marched out the door. Niles and I stood up as he left and silently watched him descend the stairs, both of us worried that in his state he might fall or even have a heart attack. Then we looked at each other in amazement. Stenger’s behavior seemed to confirm our suspicions: This was a much bigger story than we had originally imagined.

It wasn’t just Stenger, who declined to respond to my interview request for this story, who was livid with our reporting. We had piqued the ire of state officials, too. At weekly press conferences in the governor’s grand ceremonial office, when I piped up to ask a question, the governor’s sarcastic response inevitably started with, “The reporter from the National Enquirer is at it again,” followed by a non-answer. The other reporters tittered. I never knew how to reply without embarrassing myself further, so I just turned pink and took it.

Far more than my embarrassment was hanging in the balance, though. VTDigger was a new and tiny, online-only, nonprofit operation, and I had staked our reputation—and future—on this story. Government watchdog reporting was our bread and butter. If the Shumlin administration wanted to make it hard for us to report, it could. Government officials no longer returned our calls, and ignored, delayed, and denied our public-records requests regarding Jay Peak, and were slow to respond to our requests on other topics. I tried to see the stonewalling as a badge of honor, but I felt trapped and afraid.

Meanwhile, Stenger and government officials behaved as though there was nothing wrong and continued to tout the ambitious development projects and solicit foreign investors. Hundreds of additional people seeking a path to citizenship in the United States signed on to a condo project at Jay Peak, AnC Bio, and the Burke athletic center.

Most of the foreigners who invested in Stenger’s Jay Peak projects were not so-called qualified investors—people who have sufficient wealth to be allowed to purchase unregistered securities. EB-5 projects don’t require that. Instead, they were people who had cashed in their retirements, sold their homes, and poured their life savings into the developments. They hailed from 74 different countries on four continents, including Europe, Africa, South America, and Asia. Angie Mann and her husband, from East London, were among them. When they met Stenger at a trade show, they were romanced by the idea of moving to America, obtaining residency, and making what sounded like a profitable investment in Jay Peak. They said Stenger told them they could expect an annual dividend of $25,000 to $30,000, along with the return of their original $500,000 investment plus $150,000 in profit after five years. So like many others who were wooed, they sold their house and emptied their bank accounts to invest in Jay Peak. Then they moved to California.

Meanwhile, even though Stenger and government officials were icing out VTDigger, we still made progress on the story. John Kessler, general counsel for the Vermont Agency of Commerce and Community Development, began feeding me information about the biotech project, AnC Bio Vermont, which he had concluded on his own was likely a fraud. He managed to convince the commerce agency to temporarily suspend the developers’ ability to solicit additional investments for both the AnC Bio project and Burke, and was angling to get Shumlin to stop the projects altogether.

In March 2015, after months of reporting and receiving many public records and leaked documents from Kessler, I published the biggest investigation to date. In it, I reported that AnC Bio Vermont, an LLC owned by Stenger and Quiros, had bought $10 million in product-distribution rights from the company AnC Bio in South Korea. Those AnC Bio funds went to Alex Choi, the Quiros associate who founded AnC Bio in Korea and was a silent partner in AnC Bio’s planned Vermont outpost.

Meanwhile, I discovered that Quiros’s Miami company, GSI, had purchased the Bogner plant for $3.1 million and sold it to investors for $6 million, pocketing the difference. In addition, the company had never applied for FDA approval for the devices they planned to mass-produce there—even though Stenger had told the investors and the public that the company was in the FDA pipeline.

Despite the revelations that I’d uncovered to that point, no one in power seemed to care. Several weeks later, Shumlin lifted the suspension of the AnC Bio and Burke Mountain developments, allowing Stenger and Quiros to solicit more money for these projects from foreign investors.

While I had a hard time believing what was happening, other journalists had a hard time believing my reporting. As plans for AnC Bio Vermont moved ahead, Stenger and Quiros held a groundbreaking ceremony for the project. It was an eye-squintingly bright day. As I set up my home video camera, I noticed government officials were conspicuously absent.

As the event got underway, Stenger launched into a speech about how important the factory would be to the Newport economy. Then Stenger, Quiros, and other local partners grasped pristine silver shovels and started to dig.

When it was over, as I was packing up my camera, I saw a fellow reporter and greeted her with a friendly hello. She responded by condemning my reporting on AnC Bio Vermont as inaccurate. “What do you have against the developers who are just trying to help the poor people of the Northeast Kingdom?” she asked.

“Nothing,” I said. “I live in the Kingdom,” adding that I had the documents to prove that my reporting was accurate. She just scoffed and turned away.

About seven months later, I got a tip from locals that government officials had changed the locks and raided the equipment at Burke Mountain and seized computers. I jumped into my car and rushed up to the ski area to see what I could find out. When I arrived, the resort was deserted. I had missed it. I stood there alone in the dark, cursing myself.

The next morning, I was in my office at VTDigger looking at my email on my phone when a press release from the Securities and Exchange Commission landed in my inbox. I opened the email and scanned the release. It confirmed the raid at Burke. As I read on, I could hardly believe what I was seeing: The feds were confirming VTDigger’s reporting.

I jumped up from my chair and ran into the newsroom, my phone in hand, and relayed the news to my senior editor: Quiros and Stenger had been charged with misusing $200 million in investor funds and committing 52 counts of securities fraud. The Ponzi-like scheme, as the SEC called it, involved six separate projects at Jay Peak plus AnC Bio Vermont. Quiros, it turned out, had illegally used money that Stenger had raised from EB-5 investors for the Tram Haus Lodge hotel to purchase the mountain for himself. Stenger and Quiros then brought on new investors and used that fresh round of cash to backfill the hole in the Tram Haus funds. And on and on it went with each new project.

“Vindication!” the senior editor cried out.

“Yes, vindication for all of this insanity,” I replied, relieved that we had been on the right track all along.

I was so stunned that it took me a minute to organize my thoughts to pound out a story for the site. As I was writing, the state issued a media advisory for an emergency press conference at the State House. I finished my post, grabbed my notebook, and dashed out the door.

By the time I arrived at the event, the governor’s ceremonial office was already packed with members of the Shumlin administration, officials from the Vermont Attorney General’s Office, the commerce agency, and the state’s Department of Financial Regulation, in addition to lobbyists, advocates, and lawmakers. Reporters had their notebooks open and cameras at the ready.

As I walked in, still a little dazed, several reporters congratulated me. Then they cleared a path, beckoning me to sit in one of the red-velvet chairs in the front row that they apparently had been saving for me. Everyone was solicitous and deferential, which felt strange after taking so much flak over the years.

When Shumlin went to the podium, he announced that his administration had coordinated with the SEC to uncover the fraud and then praised the work of Susan Donegan, commissioner of Vermont’s Department of Financial Regulation, who showed the crowd a so-called “spaghetti map” graphic of highly complex bank transactions that the two developers had used to cover up the illegal use of investor money. He detailed how Quiros had stolen $50 million outright to pay his taxes and buy two luxury condos in Manhattan.

Not long after, a second press conference was held at Jay Peak, where Shumlin introduced Michael Goldberg, the SEC receiver who would take over the business operation of both resorts. An investor who had sold his farm in Brazil for a new life in the United States was there, too. He raised his hand, demanding to know when he would get his money back. Goldberg couldn’t say. More than 850 investors from 74 countries had little hope of getting their money back, he said, and roughly half had not received temporary green cards as promised.

After the press conference wrapped up, I was walking to my car in the resort parking lot when I heard someone call my name. I spun around to see the reporter who had gone off on me at the AnC Bio press event running to catch up to me.

“I’m sorry, Anne,” she said. “You were right all along.”

“Thank you for coming over to tell me,” I said. “I can understand why you felt that way. It’s a crazy story, isn’t it?”

“It sure is,” she said.

In no time, VTDigger’s reporting was picked up by the New York Times, the Boston Globe, and the Associated Press. Bloomberg Businessweek published a cover story on the fraud. I was interviewed on PBS NewsHour and the radio show The World. VTDigger was recognized as a finalist for three major prizes, including the Al Neuharth Innovation in Investigative Journalism Award. Suddenly, VTDigger was on the map. Our readership increased in 2016 from 125,000 unique readers a month to 200,000. Revenues jumped by $200,000. One day, I received a call from the longtime owner of the Vermont Country Store offering to lead a fund drive among the state’s major donors, which wound up bringing in nearly $4 million to support our growth.

The first thing I did with the money was hire journalist Alan Keays to pursue coverage of the dozen or so Jay Peak lawsuits that had been filed in the aftermath of the federal charges. Keays, who had risen through the ranks to become news editor of the Rutland Herald, had been fired several weeks earlier. I knew him from my days on the Sunday desk and had admired his dogged criminal justice reporting. Plus, I had to take my hat off to him: He was fired for publishing a piece about the paper’s owners’ financial difficulties.

Meanwhile, SEC prosecutors laid out their case against Quiros, arguing he’d borrowed as much as $108 million against investor funds to try his luck on the stock market. While the money was locked up, dozens of vendors and contractors were stiffed. Quiros owed about $10 million to local businesses.

In 2017, Goldberg announced that Raymond James Financial Services, one of the banks Quiros had used in the scam, had settled with the receiver for $150 million. The money went to repay the vendors, contractors, and more than half of the investors in AnC Bio Vermont.

The civil lawsuits in state and federal courts took two years to resolve. In the end, Quiros settled, turning over $81 million in properties to the government. Stenger, who did not steal money, faced claims alleging that he had hoodwinked investors. He paid fines of $175,000 to the state and federal governments.

In 2019, as the third anniversary of the SEC charges rolled around, the feds had still not criminally charged Stenger or Quiros. Keays discovered that such a long delay before filing criminal charges was rare—and published a story about it. Just two weeks later, the U.S. Attorney’s Office in Burlington charged Quiros, Stenger, and two conspirators with wire fraud and misrepresentations made to United States Citizenship and Immigration Services, which oversees EB-5 visa programs, about the AnC Bio Vermont project. Stenger and Quiros pleaded not guilty but then later struck plea deals. Quiros faces up to eight years in prison. Stenger denied involvement in fraud, and pleaded guilty instead to submitting false information to government officials. At press time, his sentencing was pending.

The story, though, is far from over. Our focus now is on what Shumlin and state officials knew, and when. It turns out the state’s involvement was much deeper than we suspected. Defense attorneys for Stenger filed 600 pages of documents that were sealed by the federal court last fall. Attorneys for VTDigger successfully sued to unseal most of the records.

We had already reported that Shumlin had stayed in Quiros’s condo at the Setai in Manhattan on at least several occasions. But the records also showed that in March 2015, before a meeting with a group of state officials, Quiros directed Shumlin into a private room. The Miami businessman had a manila folder in hand, according to an FBI interview with Pat Moulton, the former commerce secretary. It was after that meeting that Shumlin reinstated the AnC Bio Vermont and Burke Mountain projects—which the state government had suspended due to concerns over potential fraud.

Shumlin appeared to do so knowing full well that the investors would not be made whole. In our view, it seemed as though the state’s plan was to take over Quiros’s role and keep the scam going long enough to finish the Burke Hotel. According to court records, Stenger continued soliciting investors, the Department of Financial Regulation put the money in escrow, and the Vermont Attorney General’s Office paid the contractors. Instead of solving the problem, Burke became a ticking time bomb.

We are currently working to obtain additional public records related to the state’s role—and the contents of that manila folder—so that we can unlock the rest of the saga. Meanwhile, up in Newport, there is still a massive hole in the middle of the town center. Seven years ago, Stenger and Quiros had it excavated in order to build a retail and office complex, and it has yet to be filled. Other things have changed, though: There is no longer a sign in town reading, “Thank you, Bill Stenger.”