Jay Peak Vermont ski resort

The former owner and former president of a Vermont ski resort accused in a multimillion-dollar fraud case were indicted on federal charges unsealed over a failed plan to build a biotechnology plant using foreign investors' money.

The charges are against Jay Peak's former owner, Ariel Quiros of Miami, former president William Stenger of Newport, Vermont, Quiros' adviser William Kelly and South Korean businessman Jong Weon Choi.

The grand jury indictment alleges they conspired to embezzle investors' funds and deceive investors about the project's number of jobs and ability to generate revenue.

Quiros, Kelly and Stenger pleaded not guilty Wednesday to engaging in a conspiracy to commit wire fraud, participating in the conspiracy, wire fraud and concealing facts about the investor funds. Quiros also pleaded not guilty to money laundering. A prosecutor said Choi remains at large.

Quiros' lawyer, Seth Levine, said the case should have never been brought against him.

Stenger's lawyer, Brooks McArthur, said there is “the strongest possible denial that he engaged in any criminal activity at all.”

Kelly and his lawyer declined to comment.

All three were released on $100,000 bond each, and they had to turn in their passports.

The indictment alleges the defendants worked to defraud foreign investors in what was named the AnC Bio Vermont project that was supposed to raise $118 million to create a biotech facility and business in Newport, a city of just over 4,000 on the Canadian border in a remote and economically challenged region of Vermont known as the Northeast Kingdom.

Vermont U.S. Attorney Christina Nolan, speaking at a Newport news conference hours after the indictments, said the defendants sold the project as a way to bring jobs to the region.

“But the defendants lied, and they cheated,” Nolan said.

According to the indictment, the AnC Vermont project was not, in fact, designed to create the number of jobs or the amount of revenue for the Northeast Kingdom the defendants claimed, Nolan said.

“Rather, the project was designed to siphon millions of dollars to the control of Quiros and Choi, who were secretly business partners and in charge of the project,” she said.

Nolan held the news conference next to a vacant block in downtown Newport. The building that had been there was bought with money from what prosecutors say turned out to be the fraudulent activity and torn down. There are no current plans for the location.

Both Quiros and Stenger reached settlements with the U.S. Securities and Exchange Commission last year after they were accused in 2016 of misusing more than $200 million raised from foreign investors through the EB-5 visa program.

The indictments allege Quiros was the “ultimate decision maker” on the project, which dates to 2009, Stenger recruited investors, and Choi was a hidden partner. His parent company was supposed to design the facility.

The indictment alleges that by 2011, Quiros and Choi discussed doubling the price of the project. From 2012 to 2016, it said the defendants persuaded about 169 investors to give a total of $93 million for it. But the defendants discovered a new design was needed and never followed through with that.

Nevertheless, they accepted investors' money and put it into a Florida-based corporation that was used for other needs, such as loan payments, the indictment says.

The group concealed that they “lacked the money to construct and begin operations” at the plant, the indictment alleges. They presented a business plan to investors with inflated construction job numbers and misrepresented the products they planned to market.

Lisa Rathke and Kathy McCormack report for the Associated Press. Associated Press writer Wilson Ring in Newport, Vermont, contributed to this report.

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