SEC Bars and Fines Former Raymond James Manager in Ski Resort Case
The former branch manager of a Raymond James Financial office in Miami has agreed to a bar from the securities industry and an $80,000 fine for his role in a fraud tied to a Vermont ski resort that has cost the brokerage firm more than $165 million.
Joel N. Burstein helped Ariel Quiros, his former father-in-law who had owned the Jay Peak resort in Vermont, cover up the theft of more than $200 million from foreign investors between June 2008 and March 2014, the Securities and Exchange Commission said on Thursday in a settlement notice filed in U.S. District Court in Miami.
Burstein helped Quiros shuffle money among Raymond James brokerage accounts in a “Ponzi-like fashion,” using margin loans and money from investors in later projects to mask shortfalls, the SEC said in the multi-count complaint that was filed along with the settlement order.
Quiros used $50 million of the stolen money for undisclosed purposes and personal expenses and “Burstein substantially assisted in the fraud from its inception,” the SEC said in the complaint.
Burstein, who consented to a final judgment without admitting or denying the findings, will be eligible to re-enter the securities industry after 10 years, according to the regulator. His lawyer, James D. Sallah, did not return a call for comment, and Burstein did not respond to a request for comment sent through social media.
Raymond James in April 2017 reached a $150 million settlement with an SEC-appointed receiver overseeing Quiros’ assets, almost a year after agreeing to pay $17 million to the Financial Industry Regulatory Authority for “widespread” and “systemic” failures in its anti-money laundering programs.
Quiros and former Jay Peak CEO William Stenger had raised more than $350 million for the resort and other projects from more than 700 foreign investors who were seeking green cards in return for providing capital and jobs through the U.S. Citizenship and Immigration Services EB-5 Visa program.
Burstein “voluntarily resigned” from Raymond James in December 2016 after 14 years with firm. The termination came after he was named as a “defendant in a fraud-related lawsuit” involving accounts in which he was the broker of record, according to his BrokerCheck record.
When Raymond James’ anti-money laundering and customer accounts employees questioned Burstein about account activity, he said it was being done for “accounting purposes” but provided no specific details, according to the SEC complaint.
A spokesperson for Raymond James did not return a request for comment about the Burstein settlement.