Bill Stenger played a role in what has been called “Vermont’s Biggest Fraud.” An interesting question is:  Why did Stenger do what he did?

By most accounts, Bill Stenger is a good guy. In the early parts of this century, he worked as the general manager of the Jay Peak ski resort, a threadbare ski resort in far northern Vermont, an economically challenged region. He lived in the small, nearby town of Newport, and longed to both advance his beloved sport of skiing and revive the faltering economy in his region. Stenger was beloved in his community and well-respected. He was generous, loyal, and a good citizen.  Around 2006, Stenger came up with a plan to use the federal government’s EB-5 visa program to raise money for these projects. The EB-5 program enables non-U.S. citizens to apply for lawful permanent residence (green card) in the U.S. if they (a) make the necessary investment ($500,000 at the time) in a commercial enterprise in the U.S., and (b) plan to create or preserve 10 permanent full-time jobs for qualified U.S. workers.

Stenger’s plan was to turn Jay Peak into an around-the-calendar resort by adding a golf clubhouse, an ice rink, an indoor water park, a wave pool, and more. He later planned to build a large biotech manufacturing facility in Newport, and add two more hotels and three more condo complexes. Stenger projected that he would bring 10,000 jobs to the region, transforming it forever. And, indeed, he raised nearly half a billion dollars by flying around the world and pitching the EB-5 opportunity to foreign investors who hoped to get a foothold in the U.S.

Stenger made one big mistake: soon after beginning to raise the EB-5 money, he partnered with a crook, Ariel Quiros. To Stenger, Quiros seemed a natural partner. He appeared (falsely, it turned out) to be fabulously wealthy and, though he lived in Florida, Quiros loved the area, having skied there often as a child. When the Jay Peak resort came on the market in 2007, Quiros agreed to buy it, to keep Stenger in charge, and to help Stenger finance and execute his numerous development plans.

Unfortunately, Quiros immediately diverted money that didn’t belong to him to buy Jay Peak. Thereafter, he was constantly moving EB-5 money raised for newly announced projects to fill holes in the financing created by his thefts in previous projects. Quiros used diverted EB-5 money to pay his taxes, buy condos in New York City, and more. By frequently announcing new projects and letting Stenger raise more EB-5 money to finance them, Quiros kept his fraud scheme afloat for several years. Ultimately, though, the FBI and SEC caught up with Quiros. He was indicted and convicted of numerous felonies and sentenced to five years in jail. Quiros had clearly chosen to be a crook. No mysteries there.

Stenger’s situation is more complex. While Quiros stole millions, everyone agrees that Stenger didn’t steal a dime. He admits to trusting Quiros too much, and to failing to investigate his activities when questions arose. Stenger pled guilty to one count of making a false statement to the government and was sentenced to 18 months in prison. But Stenger denies having known of Quiros’s thefts. Is this plausible? Some investigators find this difficult to believe, reports New Yorker journalist Sheelah Kolhatkar. But is it so implausible?

Like all of us, Stenger’s choices and actions would have been heavily influenced by the self-serving bias, people’s tendency to gather, process, and even remember information in self-serving ways to support their own pre-existing beliefs and to reach conclusions that serve their perceived self-interest. One facet of the self-serving bias is the concept of motivated blindness—the often unconscious tendency people have to fail to notice the wrongdoing of others when to do so would be inconsistent with their own self-interest.

Company executives have overlooked a star employee’s sexually harassing behavior, where they might have noticed and punished similar conduct by an employee of middling ability. Audit firm Arthur Andersen was motivated to ignore the financial shenanigans of its most profitable client, Enron. And the San Francisco Giants’ front office personnel were highly incentivized to turn a blind eye to their superstar Barry Bonds’ obvious illicit steroid use.

To Stenger, his partnership with Quiros may have seemed so incredibly successful—raising records amounts of EB-5 money and beginning construction on project after project–that his mind refused to clearly process the red flags that arose surrounding Quiros’s activities.

Closely related to motivated blindness is the phenomenon of deliberate ignorance.  While economists often assume that people will choose to gather all easily-acquired relevant information before making decisions, this turns out not to be the case. Instead, people often prefer deliberate ignorance, defined by Hertwig and Engel as “the conscious individual or collective choice not to seek or use information.”

For example, a husband who suspects that one of the family’s children is not his, might choose not to investigate in order to preserve marital harmony. And a boss who suspects that an employee paid a bribe to close a crucial sale might choose not to investigate that suspicion, preferring to maintain plausible deniability. Indeed, Congress passed a law refusing to fund research on gun violence because the law’s supporters suspected the findings of such research would be uncomfortable for their political positions.

Although most are dubious of Stenger’s professions of ignorance about Quiros’s wrongdoing, the SEC attorney who first showed Stenger the Commission’s charges against him reports that Stenger hotly denied that he knew anything about the wrongdoing. The SEC attorney told Kolhatkar that Stenger “was either very surprised by what he was reading, or he was acting very surprised by what he was reading.” Stenger was vulnerable to being fooled, others reported, because he was overly impressed by Quiros’s apparent wealth. One of Stenger’s lawyers told Kolhatkar that “When presented with someone with status, Bill Stenger is like a kid meeting Mickey Mantle.”

When asked by reporter Liam Elder-Connors whether Stenger thought he was purposefully putting on blinders to avoid looking too closely at the worrisome indicators that were popping up regarding Quiros’s conduct, Stenger admitted: “To be honest with you, I think there’s some truth to that. I’m a half-full kind of guy. I’m optimistic. I believed in the projects, I wanted to see them come to fruition, because I knew what impact it would have [on local economies].” That sounds a lot like deliberate ignorance.

Kolhatkar quotes Stenger’s prosecutor as saying: “Stenger had a vision for making things better that was partly altruistic and partly driven by ego. The mix of those things is for a psychologist to figure out, not for me.” This is, of course, where the psychological concepts generated by behavioral ethics research can be especially helpful.

Kolhatkar also quotes Patricia Moulton, Vermont’s former commerce secretary who believed that Stenger was heavily influenced by his desire to revive his area’s economy: “Someday, there may be a syndrome named after this,” Moulton said. “You just want to do good, and the ends justify the means.” As it happens, there is a psychological concept that may explain Stenger’s actions. It is the rationalization labeled altruistic cheating, which is cheating for the benefit of someone else.

Rationalizations are the excuses we give ourselves for not living up to our own ethical standards. Because most people wish to think of themselves as good people, it’s easier for them to rationalize their wrongdoing when it benefits others. Indeed, studies show that people are more likely to cheat when the cheating will aid others as well as themselves, or (sometimes) even others instead of themselves.

For example, parents in the “Varsity Blues” scandal bribed athletic coaches at prestigious universities to help their children gain admission. The parents probably would not have paid those bribes to help themselves. But by telling themselves that they were doing it for their children, the cheating seemed okay. And the parents ignored the status and bragging rights that they enjoyed when their kids were admitted to top schools.

Similarly, studies show that students are more likely to cheat on an exam or project (even though they know it’s wrong) when they can tell themselves that they’re helping out a friend or a classmate. As Law Professor Donald Langevoort warns, “one of the most potent incentives to cheat is in service of others.”

Stenger would have been able to emphasize all the good that his project with Quiros would create—10,000 jobs! That is a powerful motivation, especially as supplemented by the fact that Stenger intended to become a millionaire himself as the project rolled along.

We will never know for certain what was going through Bill Stenger’s head as he made the decisions he did in the days described above. He might have been as fully intentional in his decisions as Quiros. But we suspect this is largely another case of a good person doing bad things where a substantial portion of the explanation can be found in familiar behavioral ethics concepts like motivated blindness, deliberate ignorance, and altruistic cheating.



Vermont Fraud:

Liam Elder-Connors, “In Exclusive Interview, Bill Stenger Discusses Regrets in EB-5 Investment Fraud Scandal,” Vermont Public, June 3, 2022, at

Anne Galloway & Alan Keays, “Vermont’s Scandal of the Century,” Boston Globe, Jan. 31, 2022.

Sheelah Kolhatkar, “A Slippery Slope,” New Yorker Feb. 5, 2024.

Alan Keays, “After Serving Time in Prison, Bill Stenger is Representing the Receiver Charged with Cleaning up Jay Peak Fraud,” vtdigger, Dec. 28, 2023, at

April McCullum & Dan D’Ambrosio, “A Ski Resort, a Dream and Greed: How a $350M Fraud Happened in Vermont’s Poorest Region,” Burlington Free Press, Dec. 14, 2020.


Motivated Blindness:

Max Bazerman & Ann Tenbrunsel, Blind Spots: Why We Fail to Do What’s Right and What to Do about It (2011).

Max Bazerman & Ann Tenbrunsel, “Ethical Breakdowns,” Harvard Business Review pp. 1-9 (April 2011).

Lisa Shu et al., “Ethical Discrepancy: Changing Our Attitudes to Resolve Moral Dissonance,” in Behavioral Business Ethics: Shaping an Emerging Field (David De Cremer & Ann Tenbrunsel, eds. 2012).


Deliberate Ignorance:

Felix Bierbrauer, “Harry Potter and the Welfare of the Willfully Blinded,” in Deliberate Ignorance: Choosing Not to Know (Ralph Hertwig & Christopher Engel, eds. 2020).

Kristine.Ehrich & Julie Irwin, “Willful Ignorance in the Request for Product Attribute Information,” Journal of Market Research 42: 266-277 (2005).

Ralph Hertwig & Christopher Engel, “Homo Ignorans: Deliberately Choosing Not to Know,” Perspectives in Psychological Science 11: 359-372 (2016).

Ralph Hertwig & Christopher Engel, “Homo Ignorans: Deliberately Choosing Not to Know,” in Deliberate Ignorance: Choosing Not to Know (Ralph Hertwig & Christopher Engel, eds. 2020).


Altruistic Cheating:

James Dungan, Adam Waytz, and Liane Young, “Corruption in the Context of Moral Trade-offs,” in Thinking About Bribery: Neuroscience, Moral Cognition and the Psychology of Bribery 85-102 (Philip M. Nichols & Diana C. Robertson, eds., 2017)

Francesca Gino & Lamar Pierce, “Dishonesty in the Name of Equity,” Psychological Science 20: 1153 (2009).

Donald Langevoort, Behavioral Ethics, Behavioral Compliance, in Research Handbook on Corporate Crime and Financial Misdealing (Jennifer Arlen, ed. 2018).

Hongyu Zhang et al., “Paved with Good Intentions: Self-regulation Breakdown after Altruistic Ethical Transgression,” Journal of Business Ethics 186: 385-405 (2023).


Altruistic Cheating:

Self-serving Bias: