The U.S. Citizenship And Immigration Services has notified Vermont officials that it intends to close the state's EB-5 immigrant investor regional center. It comes following millions of dollars in alleged fraud at Jay Peak Ski Resort involving the program — and as the state issues a report recommending the office be gradually closed.
On July 3rd, Vermont Republican Governor Phil Scott directed the state Department of Financial Regulation to review the EB-5 Regional Center's operations. The report issued Monday outlines the history of the program, its regulatory structure and offers recommendations.
The report considers four options for the future of the Vermont Regional Center: immediate closure and cessation of all activities; immediate closure and transference of projects to a private entity; status quo with new projects; or closure of the center as existing projects are completed.
The report recommends option 4 — the gradual closure of the center — because state officials believe the first two options are not legally viable and the third is not desirable.
On Friday, the federal agency that oversees the EB-5 program, U.S. Citizenship and Immigration Services, or USCIS, notified the state that it will “terminate the participation of the Regional Center in the (EB-5) Program because it no longer serves the purpose of promoting economic growth.”
Agency of Commerce and Community Development Secretary Michael Schirling says the state did not know the letter was coming, and its receipt accelerated the report’s release by a couple days. “If we were to propose closing the regional center immediately we believe that could trigger a termination on the part of USCIS which would then put the trailing ends of the projects that are still in the pipeline in jeopardy. USCIS we don’t think they have an option to come to us and say we’d like you to wind down. So that we’re hopeful creates some middle ground where we can go to them and say let’s find a solution that’s as we wind down the center it has the best positive economic impact on the investors and other interested parties and the promises made to them are upheld to the greatest extent possible.”
Although the state is recommending closing the regional center, Schirling also believes the EB-5 program has merit and that Congress should reauthorize it with appropriate reforms. “The EB-5 instrument as a financing instrument which we believe does continue to have viable use in economic development in Vermont still remains a tool that can be used by projects in Vermont in the future.”
In the footnotes of the letter of intent to terminate the Vermont Regional Center, the U.S. Citizenship and Immigration Services repeatedly cites VTdigger.org. The online newspaper has investigated the Jay Peak fraud case for years. Vermont Journalism Trust Executive Director and Digger Editor Anne Galloway says the termination of the center, although not final, was inevitable. “The state is really the regulatory arm that dropped the ball and they’re making one last ditch effort to keep it going temporarily but it’s going to close. And that’s because state officials weren’t minding the store all along.”
The state report found that since April 2016 there has been nearly $163 million in settlements resulting from the Jay Peak EB-5 fraud investigations.