A public records lawsuit between the State of Vermont and a watchdog news site, VTDigger.org, settled when the State agreed to disclose documents related to the nation’s largest EB-5 public corruption scandal. The scandal involved an over $200 million Ponzi-like scheme at a regional center run by the State of Vermont as part of a federal scheme that allows foreign individuals to secure permanent legal resident visas in exchange for investments in development projects.
The lawsuit, Vermont Journalism Trust vs. State of Vermont, Docket No: 6-1-19 Wncv, concerned public records requests VTDigger had made under the Vermont Public Records Act for documents submitted during the same time period that the owner of one of the program’s development projects, the Jay Peak resort, was accused of defrauding foreign investors. Specifically, VTDigger believed the documents would reveal what Vermont and high-ranking politicians within the state knew about the Ponzi scheme, and when they knew it.
The state withheld the requested forms, claiming they were exempt from disclosure under the Public Records Act because the forms were relevant to two distinct lawsuits related to the Ponzi scheme—one suit brought by the State of Vermont against the fraudsters and one brought by the foreign investors, many of whom had not received repayment nor Green Cards, against the state.
With the assistance of the Cornell Law School First Amendment Clinic, VTDigger filed a lawsuit against the state in January, seeking disclosure of the withheld documents.
On March 8, the parties announced a settlement in which the State agreed to turn over the requested forms and “additional Jay Peak records” the State had previous withheld from VTDigger.
The settlement agreement brings VTDigger one step closer to uncovering the truth behind the securities fraud scandal and providing transparency for the public. Law students Corina Gallardo, Rafa Agundez, and Fernanda Merouco contributed to the case, providing vital legal research and strategy.
Further information on the lawsuit, including the complaint, can be found here.