Berman Tabacco

Jay Peak, EB-5 Fraud

Daccache, et al. v. Raymond James Financial, Inc., et al., No. 16-cv-21575 (S.D. Fla.)

Berman Tabacco is co-counsel for plaintiffs in a class action brought on behalf of investors in limited partnerships associated with the Jay Peak Ski Resort in Vermont. Plaintiffs, foreign nationals whose investments were made through the federal EB-5 Immigrant Investor Program, allege that over $200 million in investor funds were misappropriated and/or otherwise misused in an elaborate, Ponzi-like scheme. Defendants’ scheme was revealed in April 2016, when the U.S. Securities and Exchange Commission announced multiple securities fraud charges and an asset freeze against Jay Peak and related business entities, the resort’s Florida-based owner, and the resort’s principal officer. Plaintiffs allege that those individuals and entities, as well as certain financial institutions and their employees, devised and executed a complex money laundering scheme wherein investor funds were improperly transferred from escrow accounts to investment accounts that were controlled by Jay Peak’s owner and used for purposes other than those specified in the limited partnership documents. Among other things, plaintiffs allege the improper commingling of investor funds and the misappropriation of more than $50 million in investor funds by Jay Peak’s owner for his personal use. Plaintiffs are seeking recovery under Florida’s RICO Act and also assert claims for common law fraud, breach of fiduciary duty, negligence, civil conspiracy and breach of contract.

On April 13, 2017, Defendant Raymond James & Associates, Inc. agreed to a $150 million settlement with plaintiffs and the court-appointed receiver for the Jay Peak Ski Resort. The litigation is ongoing against the remaining defendants.