Scamfluencers - Kingdom Con: The Vermont Ski Scam

Episode Date: September 2, 2024

Ski-obsessed Bill Stenger has big dreams for his sleepy Vermont mountain town. He pairs with a wealthy businessman to tap into an obscure government program that funnels millions from foreign investors looking to fast-track their visa applications. Bill and Ariel turn their ski resort into a year-round tourist attraction and create thousands of jobs… but millions of dollars are unaccounted for. When troubled investors band together, they discover their money is hiding in a mountain of fraud. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Wondery Plus subscribers can listen to scamfluencers early and ad-free right now. Join Wondery Plus in the Wondery app or Apple podcasts. Sachi, we grew up in places where people really loved skiing, and I need to ask, have you ever gone skiing? Yeah, I used to go like every weekend. I was the best skier on the hill. It's a hill, right? I knew you were gonna troll me.

I was like, I don't wanna make assumptions because I don't know her life. No way. Can you imagine me and my ethnic ass parents like going skiing in Calgary, Alberta? Come on. I actually have. When I was like 12, I joined my school's ski club, and I felt like I got a glimpse of what

it was all about. There is like a whole culture around it of like wealth and fancy people, and I'm gonna tell you about one ski-loving guy who turned his dream job into the ultimate 80s movie cliche, the evil rich guy taking over the mountain. It's December 2012 and Catherine Q. Sealy is in J. Vermont. Catherine is in her early 60s with a brown bob and a gray puffer vest.

She's a journalist for the New York Times, and she's here on a reporting trip along with a small camera crew. Jay is a tiny town of about 500 people in the mountains near the Canadian border. It's the middle of winter, but Catherine is actually holding her puffer vest in her hands.

Because while she got dressed for a ski resort, she's actually getting a tour of a massive indoor water park. The water park is the size of a football field. It has a big retractable glass roof and brightly colored slides twisting through the air. It's a new addition to Jay Peak, the ski resort Catherine is visiting.

Catherine's tour guide is one of the owners, Bill Stenger. Bill is 64 years old with white hair and wire-rimmed glasses. Catherine Jottsdown notes, as he proudly points out, features like the lazy river and wave pool. The water park is just one part of a huge expansion intended to create jobs and attract tourists to this part of Vermont. It's a rural, economically depressed area

known as the Northeast Kingdom, and it has the highest poverty rate and lowest household income in the state. This feels like a classic too good to be true scheme, like there's so much development and so much money being filtered into this place that's really small. It's a rural area. There isn't obvious tourist appeal like it's all a little suspicious. Yeah, it is very suspicious. And Bill tells Catherine that he and his partner, a Miami businessman named Ariel Kuros,

are in the process of building out a massive development project that includes restaurants, stores, and even a golf course, all attached to the ski resort. And they have plans to expand further. A couple of months ago, Bill announced that he and Ariel are planning even more developments in another small town nearby.

Here's what Bill tells Catherine. There's never been an economic development initiative like this in the history of the state, and there probably never will be again. Bill says the entire project will cost almost $900 million and create 10,000 jobs. That's a lot of money, but Bill is confident he can get investors the same way he did when they raised money for the water park and all of the other development at JPEG by using an obscure government funding program called EB5. The program offers green cards in exchange for investments of $500,000 in American projects, especially in areas with high unemployment.

In theory, it's a win-win. Foreign investors get a path to American citizenship, and people like Bill get to build their dream projects while creating jobs and pumping money back into the local economy. He says he's already attracted 550 foreign investors from 60 countries and raised a total of $275 million. Catherine likes what she hears. Her piece about Jay Peak is glowing. But there's a key part of the story she's missed. Because Bill and Ariel have found a waterpark-sized loophole in this government program and they're pumping it for all it's worth. No one sees it yet, but Jay Peak is at the centre of the biggest scam in the history of skiing.

And soon, Bill's vision for a bigger, better, wetter Vermont is going to end in a total wipeout. Alice and Matt here from British Scandal. Matt, if we had a bingo card, what would be on there? Oh, um, compelling storytelling, egotistical white men and dubious humour. If that sounds like your cup of tea you will love our podcast British Scandal, the show where every week we bring you stories from this green and not always so pleasant land. We've looked at spies, politicians, media magnates, a king, no one is safe. And knowing our country we won't be out of a job anytime soon.

Follow British Scandal wherever you listen to your podcasts. Truly, Annie Agar. We talk more s*** than your fantasy group chat, so buckle up and join me for a good laugh all season long. Watch the offensive line on YouTube and listen on the Wondry app or wherever you get your podcasts. From Wondry, I'm Sarah Haggye. And I'm Saatchi Cole. And this is Ska Inffluencers. For almost a decade, Bill Stenger and Ariel Quiroz brought seemingly endless money to rural northern Vermont and became local legends.

Jay Peak attracted tourists, created thousands of jobs, and earned U.S. visas for hundreds of prospective immigrants. But Bill and Ariel used that feel-good story as a cover while lining their own pockets, defrauding investors, and basking in big fish small pond glory. But when jilted investors start talking to each other, they'll uncover the most American thing of all, a massive, years-long grift. This is Kingdom Con, the Vermont ski scandal. Decades before showing off his waterpark,

Bill was just a guy trying to make it in the ski industry. It's 1984 and Bill is visiting Jay Peak. Bill's in his mid-30s and he's probably wearing a baseball cap, a bright windbreaker, and huge plastic-framed glasses. He gets out of his car and walks toward one of the buildings at the tiny resort. It's in a remote town, the hotels are seedy,

and it has janky old ski lifts. But it gets an incredible amount of natural snow and it has a lot of potential. As Bill sees his reflection in the snow-covered hills, he can't help but feel excited, because soon Jay Peak might be all his. Bill grew up riding wooden skis around his hometown in upstate New York, and ever since his first trip to a proper ski resort in Quebec as a teen, he's dreamed of owning a resort of his own. But Bill has had to keep his dream on ice for a while.

After college, he took a job working in insurance, got married, and started a family in Boston. But one day, he saw an ad in the newspaper for a job at a professional ski association, and it felt like a calling. He applied immediately and got the job. Bill's been climbing up in the world of American skiing ever since. For the past few years, he's worked as a general manager of a resort in Pennsylvania. Bill loves what he does,

but he still feels like something is missing. Managing a resort isn't enough. He wants to own one. That's actually why he's at J-Peak today. The previous year, Bill met a charismatic middle-aged man named Jacques Hebert. Jacques has a thick Québécois accent, and he looks like he's been skiing every day of his life. He has round, pink cheeks and near-permanent tan lines around his eyes from ski goggles. Jacques runs a small empire of ski resorts across Quebec.

A few years ago, he expanded into the US by buying J-Peak, and now he's looking for someone to help run it. Jacques wants to capitalize on J-Peak's proximity to Quebec and its high levels of snowfall. As Jacques and Bill walk around the resort, Bill feels convinced that he can turn it into a capital D destination. Jacques offers Bill the role of Senior Vice President and COO of JPEC.

He says he'll make Bill a partner and potentially give him an even bigger ownership stake down the road. Bill says yes. Over the next two decades, Bill and Jacques make a great team. Bill brings in state-of-the-art ski lifts. He introduces new types of ski runs for more adventurous skiers. He even makes it easier for visitors to rent a place

to stay from locals years before Airbnb. But in March 2006, tragedy strikes. Jacques dies from a brief and sudden illness. His death rocks Jay Peak, and it leaves Bill's future uncertain. Most of Jacques' revenue came from his other properties. Jay Peak itself doesn't make a ton of money, so his remaining business partners want to sell the resort.

Bill wishes he could just buy the property himself, but there's no way he can afford it. He needs to find a buyer who will let him stay on as CEO, and he knows just the guy, someone who's not just Bill's friend, but rich enough to buy the resort and fund his dream. At least, that's what Bill thinks. By 2007, about a year after Jacques' death,

Bill starts meeting with Ariel Quiroz. Ariel is about 50 years old with thinning gray hair, piercing blue eyes and thick eyebrows. A local reporter later tells a New Yorker that Ariel is, quote, the guy central casting would send over if you were looking for someone to play a dodgy character. But Bill has known him for a long time.

Ariel started visiting Northern Vermont as a child, and he's been coming to J Peak for years. The two have always gotten along. And most importantly to Bill, the resort staff seems to like Ariel too. He's known to be a big spender and a generous tipper. Plus, Ariel is a self-made man with plenty of wealth and status. He grew up in Harlem in the 60s as the youngest of six kids. He's been hustling since childhood when he sold gum to classmates from a school locker. He spent a few years in the army and then started a successful copper and wire trading company in South Korea

and an import-export business in Miami. And now Bill is giving him the chance to get into the resort business. Bill has plans for J-Peak. Big plans. And now Bill is giving him the chance to get into the resort business. Bill has plans for JPEEK, big plans. He wants to transform the resort into a year round destination. They'll add more hotels, they'll build more condos, they'll launch new restaurants. If JPEEK can turn a profit year round, Bill won't have to fire 400 seasonal employees when the snow melts every spring.

That's a lot of people that you would then have to lay off just because the weather changes. I would personally find it devastating to have to get rid of that many people, especially in a place where it's clear that opportunities are really hard to come by. Yeah, I feel like it'd be kind of brutal for a guy who seems to love this resort so much. But Bill tells Ariel that he has a way to raise the tens of millions of dollars they'd need to make his plans happen. The EB-5 foreign investment program. That's the federal program we mentioned earlier.

It's been around since 1990, and it's actually a pretty simple concept. Prospective immigrants can become eligible for a green card if they invest $500,000 in an American project. The only requirement is that the project has to create or preserve at least 10 jobs for American workers. Ariel is skeptical at first, but Bill explains he's already using it. He tells Ariel that he brought in his first EB-5 investors just last year. In that short time, he's already raised about $18 million for upgrades at Jpeak.

I recognize that this is legal, and it's just that the rules are perplexing. But it is crazy to me that any of this is allowed. Yeah, it's 100% one of those things that sounds like a scam, but actually isn't. Yeah. And Ariel still isn't totally sold, so Bill sweetens the deal. He says if Ariel buys a resort, he'll give him an additional payout worth 15% of the construction budget. That's millions of dollars. He also tells Ariel that he can have a 20% cut of each investment, which is more than

twice the typical management fee. Ariel decides this deal is too good to resist. He's in. He tells Bill that he'll buy the resort. He'll make Bill CEO and give him a bigger ownership stake. Bill is ecstatic. He's definitely taking a risk by promising Ariel so much, but he'll do anything to hang on to Jay Peak

and his dream of turning the Northeast Kingdom into a major destination. In June 2008, Ariel finalizes the agreement to buy the resort, and immediately he starts acting shady. He asks Bill and the current owners of JPEEK to put their EB5 investor money into a bank account at a small financial advisory firm where Ariel's son-in-law just happens to work. Sarah, I love a nepo baby. They always deserve what they get.

They always take care of everything. Yeah, it seems great for Ariel and his family, and it does sound kind of sketchy, but Bill agrees. After all, he and Ariel are going to be partners, right? But here's where things go from sketchy to fully illegal. The investor money is supposed to be held and earmarked specifically for EB-5 projects. But Ariel is able to do some financial sleight of hand so that all of the money in his son-in-law's firm appears to be his.

Then he makes his initial payment to buy JPEG using $13.5 million of the EB-5 investors' money. As it turns out, Ariel is not as rich as he leads on. Despite his larger-than-life persona, he's only worth about $5 million, which is nowhere near the roughly $25 million price tag on Jpeak. Bill later claims he didn't know that

or about Ariel's financial tricks with the investor money. Either way, Bill is stuck with Ariel now, and there's only one thing that can save the new JPEG leadership team, more money. It's January of 2009, more than six months after Ariel bought JPEG. Mike DuPont sits at his computer typing up an email. Mike's an experienced CFO who spends most of his spare time snowboarding, so when

he was hired by Jpeak a few months ago, it seemed like he had found his dream job. Now, as he furiously types an email to Bill, he probably feels a little nauseous. The truth is that things have felt off ever since he first started at JPEG. A CFO is supposed to manage the company's finances. But Mike hasn't been able to do that because Ariel refuses to let him look at any financial statements. After months of asking, Mike finally managed to get his hands on a single partial financial statement, which immediately raised red flags.

He noticed that Ariel used investor funds as collateral on a personal loan. That's a violation of the investor agreement, since the funds are supposed to go toward developing the resort. Jay Peak's money also seems generally mismanaged. Some EB-5 funds are fully unaccounted for. Mike is praying this is all some huge mistake, but he's not so sure. He knows Ariel usually handles the money,

and Bill is more involved in making the big plans. But in a desperate attempt to get through to someone, he's turning to Bill for answers. In his email, Mike outlines everything that's wrong with the statement he saw, and he begs for access to the rest of the documents. He also emphasizes that it is not normal for Ariel to have full control of the finances. Sachi, can you read part of Mike's email?

It says, I recognize that what I am bringing up is a time bomb and with all I have going on this is the last thing I personally need or you. I truly hope that I am wrong. Sarah, as you know, this is how I start and end all emails to everybody. That's how you send every text, Sachi. Yeah, I just like to clear my basis on this. In the email, Mike gives Bill an ultimatum. Either we get our finances in order and you promise I have no legal liability

in whatever is going on here or I resign. We're not sure how the rest of this conversation played out, but what we do know is that around five months later, Mike resigns in protest. Years later, when asked about this exchange, Bill says that Mike was a, quote, depressive character having a hissy fit. Mike is probably glad to be off the slopes at J Peak,

and the truth is, he has no idea how lucky he is. Mike doesn't know it yet, but Ariel's treating the EB5 money as his personal piggy bank, creating a hole at the center of Jpeak's finances that can only be filled with additional investor money. And that means they're embarking on the never-ending cycle of scamming that we all know and love. The Ponzi Scheme. It's December of 2011, three years after Bill and Ariel bought Jay Peak. Bill wears a black suit as he stands on a platform overlooking the newly built water park,

which they've named Pump House. Today is the grand opening, and Bill looks like a king smiling down at his kingdom of lazy rivers and giant colorful water slides. His loyal subjects are 500 local school children in swimsuits, all cheering and smiling up at him. He leans over a railing and shouts down,

are you ready? The children yell back with glee and anticipation. Bill smiles and turns a massive ceremonial metal valve. Suddenly, all the water slides and jets in the park come to life. Bill watches as waves form in the wave pool and children scream on a splash pad. He swells with pride.

He's dreamt of this moment for years. Bill claims that the water park alone created 500 new jobs. And that's in addition to the more than 1800 jobs that came from Jay Peak's new hotels. Here's a local business owner talking to YouTube channels stuck in Vermont on opening day. I'm the owner of Mike's Electric Incorporated

right here in Jay. We have been doing all the construction. We have over 70 employees employed through the EB-5 program. Thank God for that. Okay, so Bill's investments in Jay are actually working, which is always like the scariest part of a scam story, Sarah, because we have the scam kind of being effective. Like people are being positively impacted by it for now. Yeah, it is going surprisingly well and Bill is really soaking in the glory of his role as the face of Jay Peak. He's 63 years old at this point and he's achieved his dream of running a resort and so much more. He's built a water park, a hockey rink, and a conference center, and he's getting a lot of attention for it too. Just last month, he was awarded Citizen of the Year

by the Vermont Chamber of Commerce. People start to refer to Bill as the King of the Northeast Kingdom. But Bill has gotten himself trapped, and his breezy ski dream is about to turn into a double black diamond. with your Prime membership. To start listening, download the Amazon Music app for free, or go to amazon.com slash ad-free podcasts. That's amazon.com slash ad-free podcasts to catch up on the latest episodes without the ads.

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sell out. About two months after the waterpark's grand opening, Douglas Hume is reading over a draft of an email. Douglas is 68 and has a round face and pink cheeks, but he's not feeling jolly right now. He's probably doing some deep breathing because he's about to torpedo one of his most lucrative business relationships with Bill and Jay Peak. Douglas is a visa broker, meaning he helps people through the complicated process of applying for a visa and moving to the U.S. As part of this work, he acts as an EB-5 consultant.

He connects people like Bill with prospective immigrants who are looking to be investors. With his help, the immigrants get green cards, people like Bill get their projects funded, and Douglas pockets a $50,000 fee for every deal he helps close. Together, he and Bill have raised around fee for every deal he helps close. Together, he and Bill have raised around $150 million for Jay Peak and at least $15 million for Douglas. That is so much money. It's crazy how much of a profit you can make on just being the middleman. Yeah, but after more than five years of working with Bill, Douglas has serious concerns.

It all began when Douglas received an email from a financial manager at JPEG. Not the old CFO Mike, but a different guy who had a lot of the same concerns and also ended up resigning. The email described JPEG's finances as, quote, "'quite a mess.'" Douglas has also noticed that Ariel is a big spender.

Just a couple of months ago, he bought a luxury condo in New York City for almost $5 million. Despite the warning signs, Douglas kept working to bring investors to the resort. He gave Bill the benefit of the doubt, in part because of all the massive projects that Bill has been spearheading.

Just recently, Bill and Ariel announced they were going to build a conference center and new hotel in a town near J. Peak, plus a state-of-the-art laboratory and biomedical device manufacturing plant for a company in South Korea. It sounds random, but people didn't ask too many questions because of how much money these projects would bring to the area. Always bad when people are not asking enough questions simply because there is a lot of money to be made. Well, Douglas recently asked Bill for reassurance that everything is above board. He wanted to access the same financial statements Mike begged for, but Bill deferred to Ariel,

and Ariel refused. Douglas also asked Bill to assure him that they weren't using investor money as collateral for loans. In response, Bill said the investor money was safe, quote, to the very best of my knowledge. As you might expect, that wasn't enough to convince Douglas. So he told Bill he wasn't going to work with him anymore. And today, he's burning bridges. He finishes reading the email draft, which explains that Douglas no longer has confidence

in the information Bill and Ariel put out about JPEG and their other developments. And he sends it to 100 immigration attorneys. The email catches the attention of a few local news outlets who pick up the story, but nothing much comes out of it. So after a couple of months of inaction, Douglas decides to reach out directly to the local EB5 Center

to alert them about Jay Peak's shady finances. Douglas knows he's putting the center in an awkward spot because Bill helped open it. There's only one full-time employee, and he only has a job because of Bill. Besides, it's in their interest to point to Jay Peak as a success story for the program. But the director of the center can't ignore Douglas's concerns entirely, so he pays Jay Peak a visit.

The director says he's been holding quarterly meetings with Bill to go over paperwork, but this time he actually visits the resort in person. Investors later claim that this was, quote, an extravagant weekend. And Sachi, can you read what he tells the press after the visit? He says, there was absolutely nothing that was out of the ordinary. I think most people in the EB5 marketplace understand that JPEEK does it very much correctly. Sarah, this is a great example of what I like to call a word salad, which people often employ

when there are issues and they don't know how to talk about them and they give you the most confusing roundabout statement that's like a little false and like a tiny bit true, but mostly doesn't mean anything. Yeah, and Douglas can't believe it. Sure, the email to immigration attorneys didn't make huge waves, but he really thought blowing the whistle to the person overseeing the EB-5 program would stop Bill and Ariel's scam. He's clearly underestimated just how much depends on Bill and Ariel. Jobs, development, prestige.

So it's no wonder that soon, they're're gonna get out over their skis. It's September 2012, about seven months after Douglas sent his email. This is around the time that Catherine takes a tour and features Jay Peak in the New York Times. And today, Bill is standing behind a podium at the center of a packed conference room at Jay Peak. He's wearing a blue blazer and a green striped tie and staring out at around 500 people, including local officials and politicians like US senators Patrick Leahy and Bernie Sanders.

Bill starts out by taking a victory lap. He says that at this point, he and Ariel have raised $250 million for improvements in the Northeast Kingdom. Like, remember that South Korean lab and manufacturing plant they were developing? Bill says it'll be up and running as early as next year, and they're going to add another 75,000 square foot research tower. Then they're going to rebuild and expand the nearby town of Newport.

This plan includes building a window manufacturing plant, expanding the local airport, and developing the waterfront. to expand the nearby town of Newport. This plan includes building a window manufacturing plant, expanding the local airport, and developing the waterfront. Oh, and also building Newport's first hotel, a conference center, and an athletic training center. And if you think it's over, it's not. Bill then explains that he's got another plan in the works to overhaul and improve a nearby ski resort

called Burke Mountain by building new rustic lodges to house thousands of visitors. another plan in the works, to overhaul and improve a nearby ski resort called Berk Mountain by building new rustic lodges to house thousands of visitors. What he doesn't mention is that Ariel bought the resort without him knowing. Ariel paid $10 million and made his son CEO. That's a father-of-the-year move. My dad didn't do that for me. Mine didn't either, and Bill was not happy about the surprise acquisition. But today, he talks about it enthusiastically. He concludes by telling the audience that the projected

price tag for all these projects is $750 million. It's a seriously insane amount of money to throw at a historically impoverished part of the state. But no one stops to ask questions. Actually after the press conference, politicians come forward and praise Bill for everything he's doing. Here's a picture of him and Senator Leahy from that day. Can you describe it? Do you remember that show Bananas in Pajamas that we used to watch when we were kids? Like it was from Australia and it was two bananas

in like matching sleepwear. This looks like that, except they're wearing the same tie. These are two of the same men made in the same factory. It's just two eggs in suits. Well, from the outside, things look great. Pretty much the entire state of Vermont is buying what Bill is selling. But there's one group of people

who are about to start looking for answers. J-Peak's own investors. It's January 2014, about 15 months after Bill announced all his new development plans. And in Claremont, Florida, a city about 20 miles from Orlando, Tony Sutton is reading a letter from the JPEC leadership team. And his heart drops. Tony is in his 50s. He's slender and balding with dark eyebrows and blue eyes. And around six years ago, he was one of 35 people who invested in the first new hotel at JPEC. He's originally from a small town outside

of London, but he decided he wanted to relocate to the U.S. That's why the J Peak EB-5 program caught his interest. It seemed like a great way to secure a green card. Plus, it looked legit. The state of Vermont said it was closely monitoring all EB-5 projects. So Tony sold off everything he owned, invested $500,000 in Bill and Ariel's hotel project, and settled down in Florida with his family. Up until now, everything has worked exactly as promised, but this letter is a complete shock. In it, Bill writes that Ariel has bought out all of JPEG's initial investors, including Tony. Instead of equity in the hotel he funded, Tony now has an unsecured IOU. But Bill says not to worry.

Ariel promises he'll pay it back within 10 years. Tony's immigration status isn't at risk, but this is not the investment he signed up for. And he thinks there's something more going on, especially when Bill mentions that Ariel actually bought out the investors months ago. He'd just forgotten to mention it until now. Of course.

You know when you forget to mention something enormous about your business? Enormous. Like, sometimes you just forget to say it. If someone sent me that, I would immediately get in my car, drive to Vermont, and beat the shit out of him, to be honest. Oh yeah. Well, Tony starts to go over the thick stack of financial documents he got from Jay Peak

when he was filing for his permanent residency. The documents are supposed to detail the business plan for Tony's investment. But as he reads, Tony's eyes grow wide. In a loony tune style mistake, Ariel and Bill accidentally gave Tony paperwork documenting what was really happening with investor money. It's explicit about Ariel using the funds as collateral for loans and shows that he's been moving

investor money earmarked for one project to pay for another, all behavior that's explicitly prohibited by their initial agreement. This is like that episode of The Simpsons where they build a monorail and Marge finds the blueprints for the building of it and it's just drawings of a man running away with a briefcase full of money. Truly, this is exactly that. How do you mess up in this way? So Tony contacts the other investors

who had their equity turned into IOUs. About 20 of them form a group and start demanding answers. Many of the investors are like him, upper middle-class people who gave everything they had for a chance at immigration, only to realize they were lied to. him. Upper middle class people who gave everything they had for a chance at immigration, only to realize they were lied to. When Tony reaches out to Vermont's EB5 center, which is supposed to be closely monitoring Bill and Ariel's investment money, he learns that they didn't

even know about the IOUs. Fed up, Tony starts contacting government officials with fraud allegations. Eventually, he reaches the Vermont Department of Financial Regulation, and in February 2015, they launch a formal investigation. After that, Tony starts talking to an even higher authority, the SEC. They're already more than a year into their own investigation into Bill and Ariel.

Remember Douglas, the visa broker? When he didn't get anywhere blowing the whistle with state regulators, he took the case to the feds. Now, Tony is doing their work for them, offering them and the state crucial information about exactly how the scam was running. And as these investigations move forward, they're about to discover that the dream of Jay Peak

has been built on a mountain of fraud. that the dream of Jay Peak has been built on a mountain of fraud. It's April 2016, a little more than a year after the state started investigating Jay Peak. Vermont Governor Peter Shumlin is in a fancy room at the state house. Governor Pete is 60 years old, has swooped gray hair and thick eyebrows that bunch together nervously. He's wearing a dark suit and a green tie. As he talks, he anxiously rubs his hands together. He's facing a group of reporters who are here to cover his emergency press conference

about an unfolding scandal. The day before, federal agents raided Jay Peak and Ariel's Miami office. Pete leans forward into his mic and says, quote, we all feel betrayed. It's a dark day for Vermont. Pete himself feels especially betrayed. He proudly supported Ariel and Bill for years. He called them saints and miracle makers.

He stayed at Ariel's luxury New York apartment before and traveled with Bill across Asia to secure investor funding. And both Bill and Ariel have donated to his campaigns. But recently, all those high-minded development plans have started to look like fever dreams. After investors reached out to the state to complain about Bill and Ariel, and regulators started to investigate, they asked a few Korean-speaking interns to look into the biotech company. They found that it was in huge financial trouble. Its headquarters had been auctioned off by

the government. They also learned that Ariel is friends with the CEO, and they were working together to overestimate construction and equipment costs by $12 million, which would have allowed them to pocket the extra money. This is in so many ways like the most basic scam. It's just stealing. Yes, and they haven't caught Bill lining his own pockets, but it's hard to imagine that Bill didn't know something was up. And besides, he signed off on the transactions that moved investor money into accounts Ariel could access.

So even if he wasn't stealing the money himself, he was definitely an accomplice. Pete announces that charges haven't been filed yet, but the SEC has accused Bill and Ariel of misappropriating investor funds in a Ponzi-like scheme. Pete steps aside and watches as investigators bring out a chart showing the movement of money around JPEG. It should be a straight line from investors to JPEG's bank accounts,

and then into the development projects. Instead, it is so confusing that investigators started to refer to it as the spaghetti map. We have a picture of it, Sachi, and I need you to just try to describe this. Okay, so this is like full Pepe Silvia, like paranoid red string on a cork board kind of diagram. It's like a flow chart of different people and organizations and I have no idea what this means or reads as other than it looks like the explanation of something very conspiratorial.

It is just so insane to imagine people being able to piece that together without feeling like they're losing their mind. And Peter explains that in all, 836 investors from 74 countries were conned. Bill and Ariel misused $200 million of the money they raised, and $50 million of that went straight to Ariel. He used it on all sorts of things, buying a mountain for his son to run, luxury purchases like his two New York condos, and paying off his own income tax.

Bill, meanwhile, lied about the state of the projects and used his influence to deflect questions. As the press conference ends, Governor Peat looks down at his shoes. For years, the state of Vermont was practically away on vacation as J. Peek took advantage of the EB-5 program. But like all vacations, this trip is about to come to an end. Soon, Bill and Ariel will have to do what everyone does after a weekend of skiing. Face reality. Hello, I'm Dak Shepard. And I'm Monica Padman.

And we are in our seventh year of hosting actors, musicians, athletes, presidents, CEOs, scientists, and professors. Monica and I do three weekly shows with celebrities on Monday, experts on Wednesdays, and crazy stories from listeners on Fridays. It's got an ample dose of irreverence, humor, and vulnerability. We regularly get sides of our guests that were previously unknown, and it is a celebration of all the messiness that makes us human. We like it here.

We love it here. We're chatterboxes and it's a good excuse to talk. Also we're friends. Barely. Hanging on by a thread. We're so excited to officially be a part of the Wondry Network, so follow Armchair Expert on the Wondry app or wherever you get your podcasts and subscribe to Armchair Expert on YouTube. In 2018, Bill and Ariel both settled their charges

with the state of Vermont. Ariel agrees to pay the SEC over $81 million for his part in the scam. He gives another $2 million to the state of Vermont. Ariel agrees to pay the SEC over $81 million for his part in the scam. He gives another $2 million to the state, which he pays by surrendering some of his properties. Bill agrees to pay $100,000 to the state of Vermont and another $75,000 to the SEC. The thing is, the whole time that Ariel

was buying fancy properties and living large, Bill didn't actually personally profit from the scheme. It seems like he was perfectly happy to just stand by while it happened, if not for his own sake, then for the sake of building a great resort. Prosecutors basically decide that Bill wasn't entirely responsible for the misplaced funds — that was Ariel — but he knew about and assisted in the fraud, repeatedly lying to regulators and investors to keep the scam going.

A year later, in 2019, he and Ariel are both indicted by the U.S. attorney. Bill pleads guilty to a felony count of knowingly and willfully submitting false documents, while Ariel pleads guilty to conspiracy to commit wire fraud, money laundering, and concealing material information. Almost exactly three years later, Bill sits in a Vermont courthouse and waits nervously

for a judge to announce his sentence. He's 73 years old now, and the judge gives him 18 months in prison. He also has to pay an additional $250,000 in restitution. Four months later, in April 2022, Ariel gets sentenced to five years. Bill tries to appeal the restitution order, in part by blaming the government. He files an affidavit that says that actually officials like

Governor Peter Shumlin conspired to cover up the scheme. He says that he was an unknowing pawn the whole time, just a regular guy who loved skiing and wanted to make his kingdom as beautiful as possible. It doesn't work. A judge rejects his appeal. Bill only ends up spending nine months in prison before getting an early release, but to this day he's still out here preaching his innocence and his ignorance. Here he is in February 2024 talking about Ariel with journalist Mark Johnson from 802 News. Did you ever ask him, are you taking money off the top here?

Are you taking EB5 money for yourself? He took $50 million. I never did. I mean, I recognize that Bill did kind of achieve his goal. He created jobs. Jay Peak became a year-round attraction. But I don't think that necessarily means he's beyond criticism. Like, he still did a lot wrong. I don't feel sorry for him. Yeah, I mean, I don't really either.

Even if his pockets weren't lined with millions of dollars, he did still benefit from the scam because he got to keep his job. Yeah, boo. Well, as for Jay Peak, it was sold at an auction in 2022 for $76 million. The proceeds went to the defrauded investors. For years, the victims were wracked with uncertainty about their future, both financially and in terms of residency. But a powerful lawyer stepped in to make sure that no one who invested through Bill and

Ariel lost all their money or their green cards. In 2022, Congress also made changes to the EB-5 program in an attempt to reduce the potential for abuse. It's not clear yet if they've been effective, though. JPEG is actually doing really well today. The ski resort has set revenue and lift ticket records every year since 2006. Jpeak is the biggest employer in the region. But for the residents of Newport, they still have one giant reminder of the scam that went down. A huge unsightly hole in the ground bordered by a rusted chain-link fence. The hole almost takes up an entire city block

in downtown Newport. It was meant to be one of the many construction projects that would revitalize the town and simply never got finished. Now, it stands as a reminder of Bill and Ariel's unfulfilled promises. It's become such an infamous landmark that it's actually listed as a tourist attraction

with 4.5 stars on Google Maps. Do you want to read some of the Google reviews for The Hole? One says, Back before The Hole was built, downtown Newport was just another small town shopping area and apartments. But once we got The Hole, the area was completely transformed. It gives Newport a rare title that few towns get, which is the home of a great place like The Hole. This other one says, wow, what a hole. Its mystery is exceeded only by its majesty. You know what, I think I also want to go see The Hole. I think we should be flown out to see The

Hole personally. Let's ask Mr. Wondry himself. Well, it is nice that, at the very least, locals are having some fun with everything that happened. If nothing else, in their quest to build a great ski resort and line their own pockets, Ariel and Bill gave the Northeast Kingdom a waterpark, more jobs, and a big hole. Sachi, this to me felt like one of the more unnecessary scams. To me it's so interesting because there's two parts of this scam that were like working separately but together. Because Bill had this dream of creating the best resort imaginable and Ariel just wanted to scam money and find a way to take like

investor money and create a Ponzi scheme. And I think that's kind of why Bill never asked questions. Like he was getting all the glory he wanted of being like, hey, yeah, I own a ski resort. I kind of saved this little area of Vermont and I'm kind of the king of it. And Ariel was like out here buying luxury condos. It's also an interesting scam that has to do with immigration, but not really. It's so rooted in what is a legal part of the immigration system in the States, which is kind of a scam unto itself, frankly. And then they took a piece of it and ran with it and then made it super illegal as opposed

to what it is, which is merely weird law. It is so crazy that EB-5 exists at all. Creating 10 jobs isn't that big of a deal. It's not a lot of jobs for half a million dollars of investment and a green card. I mean, like the guy who runs my bodega is employing far more people, and I don't think that he's getting an expedited path to citizenship.

A green card, as you know, can take many years. Like, for some people, it takes a decade, and is a $500,000 investment worth speeding up that process? Maybe to some, depending on where you're from, but I just feel like even though it was legal, it still feels like an extremely risky way to be able to live in a country. I mean, it's a beautiful reminder that America is a business.

It is a country that has been founded and developed as a business. And so of course, the path to being here is through money and commerce and entrepreneurial, you know, quote unquote, spirit. But again, I do love that this is an immigration scam where the people who were doing things that were bad were the citizens. You know, it is just like, it really makes you think like, right now as we speak, there's a very legal government program that someone is exploiting and they will probably never get caught.

Yeah. I think that's probably true about every government program that exists in the United States. And what's the end game here for someone like Ariel, who knows he can only go so far in this Ponzi scheme and delivering this world that is like, pretty impossible to attain. Yeah, I mean, that's the thing about the scammers that we cover on this show, is that they are rarely thinking more than two steps ahead of themselves. And the first step in this case is Waterpark,

and the second step is Hole, and then the third step is jail. And you didn't think about the third step. Ah, you know what? I actually thought of the perfect punishment for Ariel and Bill. Do you want to hear it? What is it? Yes. Put them in the hole. Yeah. Yeah. And maybe they could start a podcast or like Twitch stream.

From the hole. That sounds like a punishment for us. Yeah. I think the lesson here is that if you go into business with a buddy, you should interrogate them at every turn. Yes, which is why you and I are constantly in communication. Yes. We're always asking each other where the money is going.

We have to show each other receipts for every purchase, personal or business-wise. Yeah, it's really beautiful. I simply don't trust you, and this show is telling me why I should not. I don't trust you either, and I think that's why we work. That's so nice. If you like Scamfluencers, you can listen to every episode early and ad-free right now by joining Wondry Plus in the Wondry app or on Apple podcasts. Prime members can listen ad free on Amazon Music. Before you go, tell us about yourself

by filling out a short survey at Wondry.com slash survey. This is Kingdom Con, the Vermont ski scandal. I'm Sarah Hagghee. And I'm Saatchi Cole. If you have a tip for us on a story that you think we should cover, please email us at scamfluencersatwondry.com. We use many sources in our research. A few that were particularly helpful were how Jay Peakes' owners pulled off

the biggest fraud in ski industry history by Joe Cutts for Ski Magazine. The rural ski slope caught up in an international scam by Sheila Kolhatkar for The New Yorker, and Hillary Niles and Alan J. Keyes is reporting for The Vermont Digger. Gabrielle Jollet wrote this episode. Additional writing by us, Sachie Cole and Sarah Hagge. Eric Thurm and Olivia Bryley are our story editors. Fact-checking by Meredith Clark. Sound design by Sam Ada. Additional audio assistance provided by Adrian Tapia.

Our music supervisor is Scott Velasquez for Freesound Sync. Our managing producers are Desi Blaylock and Matt Gant. Janine Cornelo and Stephanie Jens are our development producers. Our associate producers are Charlotte Miller and Lexi Peery. Our producers are John Reed, Yasmin Ward, and Kate Young. Our senior producers are Sarah Unney and Ginny Bloom. Our executive producers are Jenny Lauer Beckman, Marshall Louie, and Erin O'Flaherty for Wondery.

She struck him with her motor vehicle. She had been under the influence that she left him there. In January 2022, local woman Karen Reed was implicated in the mysterious death of her boyfriend, Boston police officer John O'Keefe. It was alleged that after an innocent night out for drinks with friends, Karen and John got into a lover's quarrel en route to the next location. What happens next depends on who you ask. Was it a crime of passion?

If you believe the prosecution, it's because the evidence was so compelling. This was clearly an intentional act. And his cause of death was blunt force trauma with hypothermia. Or a corrupt police cover-up. If you believe the defense theory, however, this was all a cover-up to prevent one of their own from going down. Everyone had an opinion, and after the 10-week trial, the jury could not come to a unanimous decision.

To end in a mistrial, it's just a confirmation of just how complicated this case is. Law and crime presents the most in-depth analysis to date of the sensational case in Karen. You can listen to Karen exclusively with Wondery+. Join Wondery+, in the Wondery app, Apple Podcasts, or Spotify.