A rare photo of all four defendants in the EB-5 fraud case. At the far left is William Kelly and next to him is Alex Choi. Bill Stenger is first from the right at the podium and Ariel Quiros is third from the right. The picture is from the AncBio groundbreaking in Newport in May 2015. The US attorney today dropped charges against Alex Choi, who remained at large. The other three have already been sentenced. VBM photo
by Mike Donoghue, Correspondent, Vermont Business Magazine The United States Attorney's Office in Vermont has decided to drop 10 felony charges against the fourth defendant in the EB-5 criminal fraud case in the Northeast Kingdom.
Jong Weon Choi, also known as Alex Choi of South Korea, has remained on the run since he was indicted in Vermont with three American business colleagues in May 2019.
Choi, 61, was convicted in South Korea for financial fraud in 2016 in connection with AncBio Korea, the Vermont indictment noted. A proposed venture in Newport was tailored after the project in Korea and was funded by the EB-5 program that provides green immigration cards in exchange for $500,000 investments, officials said.
The U.S. Attorney's Office in Vermont made a request to the Republic of Korea for evidence and testimony in 2017.
"While the government has obtained various materials from Korea pursuant to this request, it has been unable to obtain what it now believes to be important evidence relating to the case against Choi," according to the dismissal motion filed on behalf of U.S. Attorney Nikolas "Kolo" Kerest in Vermont.
"In light of these difficulties, as well as the resolution of the cases against the co-defendants, dismissal of the indictment at this time is in the interest of justice," the motion said.
Chief Federal Judge Geoffrey W. Crawford signed the dismissal order Monday morning for Choi, who the government maintained was a "hidden partner" in the fraud.
The dismissal appears to close the long-running international criminal investigation that netted convictions for three of the four initial defendants.
While the defense lawyers have maintained there was plenty of blame for some federal and Vermont officials in the bungling of the EB-5 investment plan, none were indicted.
Attempts to reach Kerest for comment were unsuccessful on Monday. Kerest has established a personal policy of not discussing or clarifying cases for the public and does not return phone messages to media members about prosecutions.
Brattleboro lawyer John C. Mabie, who was assigned to represent Choi and attended at least one court hearing for the other defendants, did not respond to a request for comment.
The indictment centers on the scheme to develop a biotech facility, AnC Bio, in Newport, as part of a series of ventures the businessmen undertook under the federal EB-5 investor program.
Part of the indictment maintained Choi and two other defendants concealed that Choi was being investigated in Korea for financial crimes, and falsely represented that AnC Korea, a company they claimed would supply the technologies that AnC Vermont would market, was not in financial distress.
The other three co-defendants are either in federal prison or headed there shortly.
Newport businessman Bill Stenger, the former president of Jay Peak resort, began an 18-month federal prison sentence in Devens, MA, on June 7.
Stenger, 73, pleaded guilty in August 2021 to a felony charge of knowingly and willfully submitting a false document in January 2015 to the Vermont Regional Center (“VRC”) as part of his promotion of the Jay Peak Biomedical Research Park EB-5 investment project, also known as AnC Vermont project in Newport.
The mastermind of the EB-fraud scheme in Vermont, former Miami businessman Ariel Quiros, and the former owner of Jay Peak has been sentenced to five years in prison. Quiros, 65, who now lives in Puerto Rico, is due to report to prison on July 26.
Quiros pleaded guilty in August 2020 to three felony charges: conspiring with the 3 co-defendants in a multi-year wire fraud scheme to defraud immigrant investors seeking green cards through the EB-5 program; money laundering for using a loan collateralized with investor funds to pay a personal tax obligation; and concealing material facts to U.S. Citizenship and Immigration Services (USCIS), which oversaw the EB-5 process.
William Kelly, a Quiros business partner, has been sentenced to 18 months in prison. He was due to begin his term on June 21, but asked for a delay. While Crawford had recommended a federal prison in Miami, Kelly later learned he would be at a minimum security prison camp in Jesup, Georgia, about a 6-hour drive from his home.
Kelly, 73, of Fort Laudersale also noted that his daughter is due to return to college on Aug. 5 and he wanted to report after she departed for school. Kelly also said he has been working with a South Florida non-profit to open a sober house in Martin County, Fla. He hopes to get a job at the home after he is released from prison, his lawyer Robert Goldstein wrote.
He also noted Kelly's wife is seeking to secure a paying job with an insurance company.
The prosecution did not object and Crawford has now set the report date for Aug. 8.
Quiros and Kelly also have been directed by the court to make $8,338,600 in restitution.
Kelly also pleaded guilty in June 2021 to conspiring with 3 co-defendants in a multi-year wire fraud scheme to defraud immigrant investors seeking green cards through the EB-5 program the concealing material facts U.S. Citizenship and Immigration Services.
When he pleaded guilty, Kelly admitted that he and his co-conspirators misled AnC Vermont investors about how investor funds would be used, about how many jobs would be created by the project, and about the timeline for this job creation.
According to court records and proceedings, the AnC Vermont project was designed to raise $110 million from 220 immigrant investors to construct and operate a biotechnology facility in Newport. EB-5 investors could qualify for permanent resident status (commonly known as a green card) by investing $500,000 in a commercial enterprise approved by USCIS and the Vermont Regional Center (VRC), which had the authority to approve and monitor EB-5 projects in Vermont.
In order to obtain a green card, each investor needed to demonstrate to USCIS that his or her investment had created, or would create within a few years, 10 jobs. From 2012 to 2016, approximately 169 investors invested about $85 million in the AnC Vermont project, in addition to paying about $8 million in “administrative fees.” Fundraising was never completed, and the AnC Vermont facility was never constructed.
