Federal prosecutors are recommending a prison sentence of six months or more for a Treasury Department official who admitted leaking more than 2,000 highly confidential bank reports to BuzzFeed, which used the information for stories about special counsel Robert Mueller’s probe into alleged Russian interference in the 2016 presidential campaign.
Natalie Edwards pleaded guilty in January to a single felony charge of conspiracy to violate the Bank Secrecy Act by disclosing “Suspicious Activity Reports” to BuzzFeed reporter Jason Leopold.
Prosecutors cited at least 11 BuzzFeed stories she served as a source for by identifying financial transactions that might have financed Russian activities during the 2016 campaign season as well as reports relating to the finances of several associates of President Donald Trump, including his former campaign chairman, Paul Manafort.
Edwards, 42, faces a maximum possible sentence of five years in prison and a fine of up to $250,000, although under non-binding sentencing guidelines, defendants are typically sentenced to well below the maximum.
Sentencing is set for Nov. 9 before U.S. District Court Judge Gregory Woods in Manhattan. In a court filing Monday, prosecutors argued that Edwards’ leaks were serious breaches of trust imposed in her through her position as a senior adviser to the head of the intelligence division at Treasury’s financial crimes enforcement network, known as FinCEN.
“It was a betrayal of the public, risked hindering both ongoing and future investigations, and was a deliberate, serious, and repeated crime. It demands serious punishment,” prosecutors wrote. “It is imperative to send a resounding message to individuals with access to sensitive, protected information that with access comes responsibility, and flagrant violations of the public trust will be met with real consequences.”
Edwards’ attorney painted her client as a whistleblower who had spent years trying to raise concerns about mismanagement and improprieties at FinCEN, turning to the media only out of frustration that her complaints to Treasury’s inspector general and to Congress were not being acted upon. “Going through the channels…had yielded no results,” defense lawyer Stephanie Carvlin wrote in a sentencing submission earlier this month. “Leopold told Dr. Edwards in their WhatsApp conversations that he was committed to her cause of uncovering and remedying corruption in the Treasury Department.”
The defense attorney also suggested an element of unfairness in Edwards being criminally charged while Leopold was not, although prosecutions of journalists in leak cases are exceptionally rare.
“He wrote articles that disclosed that information. She was arrested. He was not,” Carvlin wrote.
Prosecutors insisted that Edwards’ true motive was not to expose wrongdoing, but to achieve something far more mundane were more menial: ousting rivals at FinCEN so she could be named deputy director. The government pointed to messages where Edwards aired to her aspirations and told Leopold she wanted lawmakers to tell FinCEN’s director “to promote me next week or do something tangible.”
But Carvlin said the notion that her client was unfurling some carefully laid plan to advance in the ranks was ridiculous.
“None of these statements can reasonably lead to the conclusion that Dr. Edwards was a power-hungry conniver who was making up accusations to get a promotion,” Carvlin wrote.
Prosecutors’ criticism of Edwards in their sentencing filing was unsparing and went well beyond the leak case. They said her whistleblower complaints about FinCEN were unfounded, that she dodged work and that she took illegal steroids.
In her bid to avoid prison time, Edwards pointed to the probation-only sentence handed down earlier this year to another leaker of similar material. San Francisco-based Internal Revenue Service analyst John Fry admitted to leaking SARs about Trump personal attorney Michael Cohen to a prominent Trump adversary, lawyer Michael Avenatti. Fry also acknowledged that he spoke anonymously to the New Yorker’s Ronan Farrow about the same reports and pulled reports on former Trump deputy campaign manager Richard Gates.
Prosecutors sought a three-month prison sentence for Fry, but the judge imposed probation instead, along with a $5,000 fine.
Lawyers from the U.S. Attorney’s Office for the Southern District of New York argued that Edwards’ illegal conduct was more sustained and more serious. In the wake of Edwards’ arrest in October 2018, BuzzFeed has continued to publish stories based on FinCEN reports.
The most recent round of stories released last month by the online outlet in association with the International Consortium of Investigative Journalists, revealed what reports called widespread evidence of money laundering and tax evasion by government officials and other prominent individuals around the world.
The articles suggested that banks were complicit in the spread of dirty money by failing to stop it, but banking industry officials said they do try to drop such customers and sometimes enforcement officials ask the banks to keep accounts open to aid in ongoing investigations.
BuzzFeed has not identified the confidential sources for its reports or acknowledged any relationship with Edwards. A letter FinCEN Director Kenneth Blanco submitted to the court mentioned the most recent flurry of reports, but did not claim Edwards was responsible for them. However, Blanco said Edwards’ disclosures have impaired the intelligence center’s operations and hurt its ability to get information from banks and other financial providers.
“Domestic and international law enforcement efforts to combat money laundering, the financing of terrorism, and other illicit activity have been undermined,” Blanco wrote. “There has been a chilling effect on the financial sector’s willingness to comply with its BSA reporting and compliance requirements in a fulsome and candid manner.”
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