A Weston man pleaded guilty for his role in an EB-5 investment case that alleges his co-conspirator siphoned money from a Vermont biomedical research project that never got off the ground.
William Kelly, 72, pleaded guilty to two counts, one for conspiracy to commit wire fraud and another for concealment of material information. He agreed to cooperate in the investigation, according to a U.S. Justice Department news release.
Kelly, who entered his plea in front of Chief Judge Geoffrey Crawford in Rutland, Vermont last week, faces a sentence of up to three years.
Kelly’s attorney, Robert Goldstein in Boston, declined comment.
The Jay Peak Biomedical Research Park in Newport, also called AnC Vermont, had raised $84.5 million from 169 foreigners from 2012 to 2016. Investors ponied up another $8 million for administrative fees.
EB-5 allows foreigners a path to a green card if they invest in a venture that creates a certain number of jobs. Although the ante was increased in 2019, Jay Peak investors were working under the previous regulation that required $500,000 and at least 10 jobs per investor.
The venture was to have three lines of business: clean room rentals as well as stem cell product and artificial organ sales. But instead, about $21 million was diverted for unrelated expenses, according to the Justice Department.
Kelly admitted that he concealed from the Vermont regional EB-5 center that Ariel Quiros, another South Floridian charged in the case who has pleaded guilty, rerouted the money, the Justice Department said. Kelly also admitted that he, along with other co-conspirators, misled investors about how their funds would be used, as well as the number and timeline of jobs to be created.
Kelly and the others involved continued to maintain that the necessary number of jobs would arise from the venture, even though the project was not securing customers, the Justice Department said.
Kelly’s sentencing date is yet to be scheduled, with prosecutors pushing for a delay pending his cooperation. They also will not recommend a fine or forfeiture, but will seek a restitution order for investors.
Quiros, of Key Biscayne, pleaded guilty to wire fraud conspiracy, money laundering, and concealment charges in August 2020. He is awaiting sentencing.
His attorney, Neil Taylor in Coral Gables, said Quiros is doing “whatever he can to make amends for his involvement.”
“Mr. Quiros was the first one to step up and take complete responsibility for what happened,” Taylor said. “He continues to cooperate with the federal government.”
A third defendant has pleaded not guilty and is to go to trial in October, and a fourth defendant is at large, according to the release.
The foursome originally were charged in May 2019. The case is one of a few alleged Jay Peak EB-5 frauds. The Securities and Exchange Commission in 2016 alleged a “Ponzi-like” scheme involving a Northern Vermont ski resort. That case is considered the biggest alleged EB-5 fraud in history.