News

FinCEN Official Arrested, Accused of Leaking Thousands of SARs to Reporter

By Valentina Pasquali

A senior U.S. Treasury Department official faces up to 10 years in prison after allegedly disclosing sensitive transactional data pertaining to U.S. and foreign individuals and entities under federal investigation.

Natalie Mayflower Sours Edwards, a four-year veteran of the department’s Financial Crimes Enforcement Network, or FinCEN, was arrested by FBI officials in Virginia on Tuesday for providing an unidentified reporter thousands of suspicious activity reports, or SARs, and other restricted government documents beginning one year ago.

Edwards allegedly used an encrypted cellphone application to send the reporter hundreds of messages with images and descriptions of the 24,000 documents she is accused of downloading—a cache that includes SARs, spreadsheets, internal FinCEN communications, and “highly sensitive” data on Russia, Iran and Islamic State.

Some of the leaked records detailed transactions by President Donald Trump’s former campaign manager Paul Manafort, Russian real estate developer Aras Agalarov and other targets of Special Counsel Robert Mueller’s probe into suspected collusion with Russia to steer the 2016 U.S. presidential election in favor of the Republican candidate.

“Beginning in or about October 2017… and January 2018, Edwards saved thousands of FinCEN files, including all of the SARs implicated … to a flash drive provided to her by FinCEN,” a federal investigator claimed in an affidavit included in the 18-page complaint unsealed Wednesday.

The complaint separately alleges that an unnamed associate director at the bureau who supervised Edwards also sent the reporter hundreds of texts and encrypted messages over the past year. A FinCEN spokesperson did not return inquiries seeking the identity of the alleged second leaker by press time.

Sources contacted by ACAMS moneylaundering.com identified Edwards as an employee of FinCEN’s intelligence division, and a copy of the agenda for an April 2015 cybersecurity conference in New York identifies Kip Brailey, a 26-year veteran of the CIA and Office of the Director of National Intelligence, as the head of that division.

The data leaked by Edwards allegedly formed the basis of 12 news articles published from Oct. 29, 2017 to Oct. 15, 2018, covering everything from the 13 SARs tied to Mueller’s case against Manafort to several transfers by Russian diplomats that Citibank flagged as suspicious.

Federal prosecutors declined to name the reporter who received the files but the dates, headlines and content of the articles described in the complaint match the work of Jason Leopold, a Los Angeles-based journalist for Buzzfeed News.

The latest article that federal prosecutors say is based on the leaked SARs was published on Monday of this week, and describes millions of dollars in loans TD Bank approved for a subsidiary of Russian real estate company Prevezon Holdings in 2012 despite evidence the firm was involved in financial wrongdoing in Israel and Russia.

According to the FBI affidavit, Edwards told federal investigators on Tuesday that she considered herself a “whistleblower” who shared the SARs solely for “recordkeeping” purposes.

FBI officials managed to verify that Edwards filed a whistleblower complaint and met with congressional staffers prior to the leaks, but claimed both of those events involved an issue unrelated to the SARs.

The complaint against Edwards outlines “serious violations” that federal officials must address to prevent a “chilling effect” on SAR filings going forward, Peter Djinis, a former senior official with FinCEN, wrote in an email to moneylaundering.com.

Leaked SARs place financial institutions in a “difficult position since their customer now knows that their bank is reporting highly sensitive information to the government,” Djinis, now an anti-money laundering consultant in Florida, wrote. “I think FinCEN has a duty to immediately impose controls to prevent such damaging access to its database.”

The alleged leak of privileged data from FinCEN is unprecedentedly voluminous but not unique.

In a May 16 article published in the New Yorker, an unnamed investigator said he had disclosed the content of two SARs filed on Trump’s former attorney Michael Cohen out of concern that the documents had been surreptitiously removed from FinCEN’s database.

FinCEN officials explained the next day that they had restricted access to the SARs in accordance with the bureau’s procedures for protecting reports on high-profile subjects.

Topics : Anti-money laundering , Corruption/Bribery , Counterterrorist Financing
Source: U.S.: Courts , U.S.: Department of Justice , U.S.: FinCEN
Document Date: October 17, 2018