A proposed $71.5 million class action suit against brokerage firm Raymond
James & Associates and fund manager Joel Burstein, was stayed by Florida
U.S. District Judge Kathleen M. Williams, while the U.S. Judicial Panel
on Multidistrict Litigation (JPML) considers consolidation of the case
with other similar pending suits in Vermont.
The judge issued a stay in the EB-5 fraud case brought by Carlos Enrique
Hiller Sanchez—who seeks to serve as the named plaintiff in the
class action— against Raymond James and Burstein, alleging misuse
of funds designated for a Vermont ski resort known as “Jay Peak”
and implementing a fraudulent financial structure.
The stay was issued as there are at least five other cases, in various
jurisdictions, which the JPML is considering for consolidation. The stay
is likely seen as a short-term procedural break until a decision is made.
According to the order, unless extended, the stay is in effect only until August 1.
Several other investors have filed suit against the firm and the fund manager.
For instance, in another lawsuit filed in June, an investor named Alexandre
Daccache, filed a putative class action claiming that the $350 million
invested in an EB-5 immigrant investor program was never used for the
project it was intended, a biomedical research facility. Rather, the investor’s
monies were used to pay for unauthorized projects and the personal expenses
of Ariel Quiros, owner of the Jay Peak development.
In addition, the U.S. Securities and Exchange Commission recently filed
a fraud lawsuit against Ariel Quiros and Jay Peak CEO William Stenger,
accusing them of conducting a $200 million fraud in a Ponzi-like scheme
to cover losses in unrelated projects and inappropriately using investor’s
funds for personal expenses.
The case is being heard in U.S. District Court for the Southern District
of Florida under Hiller Sanchez et al. v. Raymond James & Associates,
case number 1:16-cv-21643.
Contact Geraci Law Firm at (949) 298-8050 today, or contact
Melissa Lucardirectly for more information.