Leaking Cohen’s financial data

IRS analyst charged with leaking Cohen’s financial data to Avenatti

By BRENT D. GRIFFITHS

The Justice Department has charged an IRS analyst with leaking confidential information about the banking transactions of Michael Cohen, President Donald Trump’s former longtime attorney, to the lawyer Michael Avenatti.

According to a federal complaint unsealed on Thursday, John C. Fry, who works in the IRS’ San Francisco office, downloaded multiple sensitive documents with Cohen’s private banking information on May 4, 2018, and quickly placed a call to a cellphone number associated with Avenatti. Fry was able to access those files, and additional ones he made after the call because he assists IRS agents who review suspicious-activity reports — documents that banks and others are required by law to file when they are aware of a potentially suspicious financial transition. Cohen’s accounts had generated multiple such reports.

Cohen was Trump’s personal attorney in 2016 during the presidential campaign when he paid the adult-film actress Stormy Daniels $130,000 to stay quiet about an affair she said she had with Trump. It was later discovered that the payment potentially violated campaign-finance law. Avenatti last year filed a lawsuit on behalf of Daniels in her attempt to void a nondisclosure agreement about the alleged affair.

Late last year, Cohen was sentenced to three years in prison after pleading guilty to tax fraud and lying to Congress about work he did on a proposed Trump Tower in Moscow. Multiple investigators, including special counsel Robert Mueller and his team, are looking into whether Trump campaign officials helped Russia interfere in the 2016 election. Cohen is set to begin serving his sentence in May.

The federal complaint that was unsealed on Thursday says Fry verbally admitted to federal investigators that he leaked the documents to Avenatti, and also made a written statement to the same effect. He faces a maximum of five years in prison and a fine of $250,000 if convicted of the unlawful disclosure of suspicious-activity reports.

Just four days after Fry accessed reports related to Cohen, the complaint alleges, Avenatti tweeted that Cohen had been paid $500,000 by a company linked to a Russian oligarch. The Russian-linked payment was routed through Essential Consultants, an LLC that Cohen also used to accept payments from companies like AT&T and Novartis in a bid to turn his status as Trump’s longtime fixer into cash as companies scrambled to understand the then-nascent administration. In a document posted on Twitter, Avenatti further outlined his claims, according to prosecutors.

Avenatti, according to the complaint, also gave information about the reports to The Washington Post for an article it published on May 8.

The information sparked a flurry of news reports, and AT&T, Novartis and other companies quickly confirmed their relationships with Cohen and issued conciliatory statements. But the source of the documents remained a mystery, a subject that received renewed interest after the New Yorker published a report by Ronan Farrow, a Pulitzer Prize-winning journalist, that featured a “law enforcement official” who was going public with his motivation to leak the information.

The complaint, following traditional protocol, does not name Farrow, but describes a “Reporter-1” who published a piece for the New Yorker titled “Missing Files Motivated the Leak of Michael Cohen’s Financial Records” — leaving little doubt that Farrow is the journalist referred to, since his is the sole byline on the article.

On Thursday evening, Avenatti, who was named in the indictment but who has not been charged with any wrongdoing, said he did nothing improper.

“Neither I nor R. Farrow did anything wrong or illegal with the financial info relating to Cohen’s crimes (the courts have found that the BSA does not apply — see below),“ Avenatti wrote on Twitter, referring to the Bank Secrecy Act. “And if we did (we didn’t), then every reporter in America would be jailed and unable to do their job.“

Fry was released on a $50,000 bond and is next scheduled to be in court on March 13.