Alleged Vermont ski resort Ponzi scheme suit dismissed

By Elizabeth Alt | May 24, 2018

MIAMI -- Judge Federico A. Morino issued an order May 15 for the U.S. District Court Southern District of Florida to dismiss a plaintiffs’ class complaint, alleging the owner of two Vermont ski resorts had used investor money to buy and fund his resort projects.

Morino ruled the plaintiffs lacked standing to sue resort owner Ariel Quiros, and that the court lacked jurisdiction over the People’s United Financial, Inc., and People’s United Bank. “The due process clause prohibits the court from exercising personal jurisdiction over the People’s defendants”.

Alexandre Daccache and a class of plaintiffs sued several parties in August 2017, alleging common law fraud, aiding and abetting common law fraud, civil conspiracy, negligence, breach of contract and breach of fiduciary duty. Raymond James & Associates, Inc. and Joel Burstein were dismissed prior to the May 16 order, and William Stenger was defaulted. The parties that remain in the suit were Quiros, People’s United Financial Inc. and People’s United Bank.

Daccache alleges more than $300 million was raised by investors to build properties for Jay Peak Resorts and Q Resorts, owned by Quiros. The complaint alleges securities were sold “in the form of limited partnership interests” to build the hotels in an alleged EB-5 scheme to purchase Jay Peak Inc. which was owned at the time by the Canadian company Mont Saint-Sauveur International Inc.

The plaintiffs, who invested in the projects, argue that investor funds were transferred to escrow accounts at People’s Bank and used as the funds as collateral to purchase the hotels without informing the investors, violating the limited partnership agreement they signed.

Quiros and the People’s defendants filed a motion to dismiss, alleging the plaintiffs lacked standing to bring derivative claims, do not allege a Ponzi scheme, have not alleged any injury from investments in the alleged Ponzi scheme, did not allege Quiros knew of the purported fiduciary duties, and failed to prove any criminal wrongdoing.

Morino stated the plaintiffs failed to identify specific people or dates that prove People’s Bank was part of the alleged conspiracy and fraud, noting the plaintiffs “state conflicting allegations as to what entities participated in the fraud.”

The order stated the plaintiffs lack standing to sue Quiros under Florida law and that they fail to satisfy the direct harm requirement by not sufficiently alleging “an injury separate and distinct from other investors”.

Morino ruled the plaintiffs have not alleged that the limited partnerships were only created as a way for Quiros to raise money, but “concede that the overwhelming majority of the limited partnerships build and opened the projects, just as plaintiffs expected when they made their investments.''

U.S. District Court for the Southern District of Florida, Miami Division, case number 1:16-cv-21575-FAM

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