(Bloomberg) -- President Donald Trump's hunt for leakers in his administration snared a senior Treasury Department employee who was charged with giving a journalist bank records about suspicious transactions involving Paul Manafort, Rick Gates, and accused Russian agent Maria Butina.
The prosecution of Natalie Mayflower Sours Edwards is intended to send a signal that Treasury will punish violations of a law designed to protect sensitive client information that banks flag to the department, said a senior department official who asked not to be identified.
“The government is taking very seriously any federal employee who is leaking protected information,” said attorney Mark Zaid, who's represented workers in leak investigations. But so far the government appears to be stopping short of going after the reporter who got the information.
The Trump administration “has not decided to cross any line yet with respect to the media receiving protected information,” Zaid said. “They don't even list the reporter as an unindicted co-conspirator.”
Edwards, 40, was charged Tuesday in New York with leaking Suspicious Activity Reports, which banks file confidentially to alert investigators to potentially illegal transactions. She gave them to a journalist who wrote a series of investigative articles touching on Special Counsel Robert Mueller's probe of Russian interference in the 2016 election, according to the FBI.
Edwards appeared Wednesday in federal court in Alexandria, Virginia, near her home. U.S. Magistrate Judge Theresa Buchanan said she could remain free pending trial.
The judge barred her from contacting the reporter referred to in the criminal complaint or any co-workers outside the presence of her lawyer. The reporter and the news organization weren't identified in the complaint, but BuzzFeed published the articles cited by prosecutors.
Edwards's lawyer, Peter D. Greenspun, declined to comment. BuzzFeed also declined to comment.
Edwards is a senior adviser to Treasury's Financial Crimes Information Network, or FinCEN, which targets illicit use of the U.S. financial system.
At least one co-worker may be in legal peril. Prosecutors said Edwards's boss, an unidentified co-conspirator, also communicated with the reporter, according to an 18-page FBI complaint. Prosecutors say Edwards looked for SARs records “at Reporter-1's request” and they quote the journalist suggesting names she could search in a database.
Click here to read the criminal complaint
President Donald Trump has railed against leakers in his administration in postings on Twitter.
The so-called leaks coming out of the White House are a massive over exaggeration put out by the Fake News Media in order to make us look as bad as possible. With that being said, leakers are traitors and cowards, and we will find out who they are!
Edwards's prosecution echoes, most recently, that of Reality Winner, an employee of a military contractor, who took classified information about Russian efforts to interfere in the 2016 U.S. presidential election, and sent it to The Intercept, an investigative digital publication.
Under the Bank Secrecy Act, financial institutions must report suspicious transactions, such as payments of more than $10,000, or those that are made to people and entities on the Treasury Department's sanctions list.
Edwards began communicating with the reporter in July 2017, according to prosecutors. Between October 2017 and January 2018, she saved thousands of FinCEN files, including all the SARs cited in the case. Her leaks generated a dozen stories.
When she was arrested Tuesday, Edwards had a flash drive which apparently contained SARs, as well as a phone containing communications over an encrypted application in which she transmitted the reports to the reporter, U.S. Attorney Geoffrey Berman in New York said in a statement.
Edwards confessed to leaking the SARs to the reporter when questioned by investigators, although she “falsely denied” knowing that the material was going to be published, according to the complaint. She allegedly told agents she was a “whistle-blower” who provided the SARs to the reporter for “record keeping.” Prosecutors said she had previously filed a whistle-blower complaint in a separate matter.
The transaction reports that were leaked to the news organization pertained to payments involving Manafort, former Trump campaign chairman, Gates, Manafort's business partner, as well as transactions involving a Russian company called Prevezon that was tied to laundered funds used to purchase New York real estate. Manafort was convicted in August of tax fraud and bank fraud. Gates pleaded guilty and testified against him.
Zaid said Edwards's case shows again how leakers can't expect to avoid getting caught if they use email and electronic devices.
“People don't seem to realize how easy it is for the government to ascertain whether someone has leaked something if they leave an electronic trail,” Zaid said.
Zaid also said that federal whistle-blower protections don't extend to employees who illegally disclose protected information.
The SARs listed in the charges Wednesday aren't the only ones that appear to have made their way into the public sphere.
In May, Michael Avenatti, a lawyer for Stephanie Clifford, released a summary of information about bank transfers involving Trump's former lawyer Michael Cohen. The records showed hundreds of thousands of dollars moving from companies including ATT, Novartis and a firm tied to a wealthy Russian, to a shell company that Cohen had set up to handle payments to Clifford.
Here are some of the articles allegedly informed by the leaks:
--With assistance from Caleb Melby, Bob Van Voris and David Voreacos.
To contact the reporters on this story: Saleha Mohsin in Washington at smohsin2@bloomberg.net;David Voreacos in federal court in Newark, New Jersey, at dvoreacos@bloomberg.net;Tom Schoenberg in Washington at tschoenberg@bloomberg.net;Christian Berthelsen in New York at cberthelsen1@bloomberg.net
To contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, ;David Glovin at dglovin@bloomberg.net, Joe Schneider, Kevin Whitelaw
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