Connecticut Department of Banking (DOB) officials improperly withheld a number of categories of records in a Freedom of Information Act (FOIA) request related to an enforcement action brought against a former Connecticut-based mortgage lender.

John DiIorio served as the principal of 1st Alliance Lending, LLC, which has been the subject of legal action brought by the state and the federal government. The DOB began investigating 1st Alliance in 2018 over allegations it was using unlicensed staff to process mortgage applications. The DOB also revoked 1st Alliance’s license and issued a civil penalty. DiIorio maintained throughout the legal proceedings that he had done nothing wrong.

On April 12, 2024, DiIorio sent a FOIA request to the DOB, which contained both follow-up communication to a previous request, and a new request.

In the new request, DiIorio asked for email communications from a number of DOB employees that referenced a number of key phrases relating to the legal case against 1st Alliance for several dates, as well as email communications that referenced other keywords, including FOIA.

In June, the DOB provided 7,584 pages of responsive records on three different dates. On July 11, they notified DiIorio that the request was complete and all non-exempt records had been released. They further stated that redactions had been made, but did not specify which exemptions were claimed, and that documents had been withheld under a section of state statute that allows the DOB to not disclose certain records.

On August 9, DiIorio filed a complaint with the FOIC, alleging the DOB violated FOIA by not turning over all responsive documents and by failing to adequately search for responsive records.

At the hearing on the complaint, the DOB’s FOIA coordinator testified that “he believed that he had withheld certain records as nonresponsive” to DiIorio’s April 12 request. But the DOB also filed an affidavit from a paralegal specialist who stated that no emails were discarded or withheld for being nonresponsive.

She stated withheld one record was withheld that DOB officials had “deemed to be a duplicate of another record.” DOB did turn it over with a link redacted. When the FOIC reviewed the record during an in camera review, they found it to be “substantially identical to a different record that was previously disclosed to the complainant with a link redacted.” The commission also found that when the DOB realized it was not “an exact duplicate because it was sent to a different individual than the record that had been disclosed,” they turned it over to DiIorio with the link redacted.

The commission deemed this to be an “inadvertent” mistake and concluded that the DOB did conduct a “reasonably diligent and thorough search for responsive records.”

On March 13, 2025, the DOB submitted a number of records for in camera review, for which they were claiming attorney-client privilege, the preliminary drafts exemption, and an exemption for documents that reveal strategy in pending litigation.

While the FOIC found many of the records for which the DOB was claiming attorney-client privilege fell under that provision, they found the agency improperly withheld the names of senders and recipients and the dates emails were sent. They also found the DOB had shared some of the documents they were claiming attorney-client privilege for were shared with third-parties, which waives that privilege, and should not have been withheld.

The FOIC further found that the DOB did not meet its burden to prove the preliminary drafts exemption applied to the records it was withholding. The preliminary drafts exemption allows public agencies to withhold draft documents if they can show that there is greater public interest in withholding them than disclosing them. While the FOIC found the records the DOB was claiming that exemption for were drafts and the DOB’s FOIA coordinator claimed they had performed the required balancing test, they provided no evidence showing what public interest was served by withholding them.

“Accordingly, it is found that the respondents failed to indicate the reasons for their determination to withhold disclosure of such records and failed to prove that such reasons were not frivolous or patently unfounded.” the FOIC’s finding states.

The commission found the DOB violated FOIA by failing to turn over some of those records, but also found attorney-client privilege applied to others, despite DOB officials not claiming it on those particular records.

The DOB also claimed an exemption that allows records to be withheld if there are “reasonable grounds” to believe they might lead to harm to government buildings or property. The exemption requires an agency to consult with the commissioner of the Department of Administrative Services (DAS) to determine what constitutes reasonable grounds.

The FOIC found the DOB provided no evidence that they consulted with DAS to determine whether there were reasonable grounds. On the in camera index, they noted the records were withheld in relation to emergency preparedness and recovery plans and that a security clearance list had been redacted but turned over. The commission found those records were not exempt and that the DOB violated FOIA by withholding them.

The DOB further claimed an exemption that allows agencies to withhold records that contain information about internal procedures or codes and software that would compromise their IT systems if released. The FOIC found that the records for which the DOB claimed this exemption contained a link, a username, and a password. They also found that the DOB did not offer any evidence that those things were a code not otherwise available to the public or would compromise their IT systems if released.

The FOIC therefore found the DOB violated FOIA by withholding them, but did not order the agency to turn the records over in case the personal identities of employees were revealed, leading to an invasion of privacy.

The DOB submitted a second batch of records for in camera review on March 26, 2025, consisting of 10,093 pages of records. They claimed most of them were confidential records and exempt from disclosure.

While the FOIC found upon review that some records were confidential or contained investigative information, they also found others had been improperly withheld.

DiIorio also argued, both in hearings and in a post-hearing brief, that any records the DOB was claiming were exempt because they were confidential agency records that were related to the agency’s actions against 1st Alliance should be released. While state statute allows agencies to withhold confidential records, it also stipulates that provision does not apply to any records relating to “publicly adjudicated disciplinary and enforcement actions” for anyone included in the Nationwide Multistate Licensing System and Registry (NMLS) “for access by the public.”

The commission concluded that portion of statute applies to “records that are made public through publicly adjudicated disciplinary and enforcement actions” and that 1st Alliance was a person included in the system for public access. As a result, they found a number of records were not covered by the confidentiality provision and should have been turned over.

They also found records in the second in-camera review that the DOB had claimed contained information about internal procedures or codes and software that would compromise their IT systems if released. As with the first batch of records submitted for in camera review, the FOIC found these contained a link, a file location, and passwords and that the DOB had not provided any evidence that releasing them would compromise their IT system. While they found the records were improperly withheld, they declined to order their release in case personal information was released.

The commission ordered the DOB to turn over all records it had improperly withheld within 30 days.

At the meeting where the commission voted to adopt the hearing officer’s finding, DOB attorney John Langmaid argued the finding against them was not necessary because they had reviewed the records the hearing officer flagged as inappropriately withheld and turned them over.

DiIorio called this a “blatant misrepresentation” at the hearing and in an email he forwarded to the FOIC during the meeting and which he also shared with Inside Investigator. He also attached communication with Langmaid about the request that he said shows Langmaid’s claim that the records had been turned over were false.

The commission voted unanimously to adopt the hearing officer’s findings.

Following the meeting, the DOB submitted a motion to reconsider two matters “not reached on July 23 due to complexity of the case and time limitations.”

DOB argued that the commission wrongly concluded they had waived attorney-client privilege for an email and attachment by sharing it with a third party, writing that the “third party” is in fact a person with whom Respondents can share privileged information without waiving the privilege.” They also argued that the attachment contained judicial decisions published by Lexis-Nexis that are protected by federal copyright.

Secondly, they also took issue with the FOIC’s reading of a carveout in state law for records the DOB can withhold to protect confidentiality, unless they are adjudicated enforcement or disciplinary actions included in NLMS for public access.

They argued the FOIC’s finding that certain records related to the DOB’s actions against 1st Alliance were not confidential went against a prior commission decision against DiIorio. They also argued the commission’s decision misread that section of state statute, which they claimed was “drafted and proposed by the Banking Commissioner, and adopted by the legislature, because the subjects of disciplinary actions wished to use the Banking Commissioner’s §36a-21 confidentiality duties to prevent publicity of their discipline.”

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