US attorney drops charges against 4th defendant in EB-5 scandal

Alex Choi at a ribbon cutting for ANC Bio in 2015. File photo by Anne Galloway/VTDigger

The U.S. Attorney’s Office in Vermont has dropped its charges against Jong Weon Choi, also known as Alex Choi, the South Korean man whom officials have called a “hidden partner” in the largest fraud case in the Green Mountain State’s history.

Choi has been on the lam since 2019, when he and three other men were indicted in federal court in Vermont on criminal charges related to AnC Bio Vermont, a proposed biomedical center in Newport that never got off the ground.

More than $90 million was raised for the development from over 160 foreign investors through the federal government’s EB-5 visa program. But the project was “nearly a complete fraud,” the U.S. Securities and Exchange Commission said. 

Nikolas Kerest, U.S. attorney for Vermont, wrote in a June 24 court filing that the federal government requested evidence and testimony from the South Korean government in 2017.

While the U.S. government has received materials related to that request, Kerest said, officials have not been able to obtain what they now believe to be important evidence in the case against Choi. 

“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 interests of justice,” the U.S attorney said.

Kerest told VTDigger on Tuesday that, as prosecutors weighed the strengths and weaknesses of their case against Choi, they determined it was not the best use of their “finite resources” to move forward with prosecuting him. 

Judge Geoffrey Crawford of U.S. District Court for Vermont signed a notice dismissing the charges against Choi on Monday. According to court filings, Choi has not entered the United States or appeared before the court during the course of the legal case.

In April, the three other defendants — Ariel Quiros, Bill Stenger and William Kelly — were sentenced to serve federal prison terms ranging from 18 months to five years. 

Choi was convicted of financial fraud in South Korea in 2016 stemming from a venture he headed up known as AnC Bio Korea, which served as the basis for the Vermont project. 

It was unclear where he was living at the time of the 2019 indictment. 

That indictment came more than three years after state and federal regulators leveled civil lawsuits against Quiros and Stenger, alleging the two men misused $200 million of the $350 million they raised through the EB-5 program.

The money was raised over an eight-year span to fund massive redevelopment projects, including hotels and waterparks at Jay Peak, as well as in Burke and Newport, where the biomedical research facility had been planned.

Quiros, the former owner of Jay Peak Resort — who prosecutors called the “wheeler-dealer” in the EB-5 scandal — was sentenced to five years in prison, the longest of the three defendants. He is set to begin his sentence on July 26. 

Stenger, former president of Jay Peak, received an 18-month prison sentence for his role in the fraud. Stenger pleaded guilty in August 2021 to submitting false information to the government about the proposed biomedical facility. He reported to federal prison in Massachusetts earlier this month.

And Kelly, termed by prosecutors the “consummate fixer” who worked at trying to “outwit” regulators, also was sentenced to 18 months in prison — and three years of supervised release — stemming from the scandal. He will report to federal prison on Aug. 8.

John Mabie, a Brattleboro attorney who was appointed to represent Choi, did not respond to a request for comment Tuesday.

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