WASHINGTON, May 18 — The identity of the law enforcement official who supplied details of Michael Cohen’s banking activities to media-savvy lawyer Michael Avenatti probably won’t remain secret for long, according to people who work in the field.
Anyone who gains access to the government’s Financial Crimes Enforcement Network database of bank-generated suspicious activity reports, known as SARs, leaves an audit trail, they explained. So whoever searched for FinCEN reports filed against personal or business accounts associated with Cohen, President Donald Trump’s longtime personal lawyer, left a digital record that is almost certainly under review.
Once the information became public through news reports, the Treasury Department’s inspector general began an inquiry into the suspected leak.
The individual provided an explanation for the leak in an interview with Ronan Farrow of the New Yorker, who referred to the person as an official and not as a man or woman. The official says that he grew alarmed that he was unable to find two earlier reports made by First Republic Bank about transactions in Cohen’s consulting account and that he feared information was being withheld from law enforcement officials.
Explaining his motivation, he said he knew that leaking the suspicious activity report violated bank secrecy laws but was willing to take the risk out of concern that similar reports involving Cohen had mysteriously disappeared.
More than 10,000 agents, analysts and investigators from more than 350 federal, state and local agencies across the US have access to the database. There are approximately 30,000 searches of the data every day, according to FinCEN’s website.
“Government employees and law enforcement personnel with access to the system are not authorized to publicly disclose SARs,” FinCEN spokesman Steve Hudak said.
Anyone with experience using the FinCEN database would know how easy it would be for investigators to track him down. In a sign that the leaker may not have been an expert, Avenatti’s trove of records included transactions involving other Michael Cohens who were not at all related Trump’s former attorney.
The contents of the First Republic report, now largely verified by the counterparties, described payments made to Cohen’s company by Columbus Nova, a private equity firm with ties to Russian billionaire Viktor Vekselberg, as well as payments from corporate clients including AT&T Inc. and Novartis AG.
First Republic declined to comment.
According to people involved in SARs work, reports don’t disappear from the FinCEN database. Sometimes they are restricted, for example when the disclosure might compromise a criminal investigation, or when they involve a law enforcement employee who might himself be suspected of corruption or other wrongdoing.
In the latter case, investigators would not want to let the person learn, by poring over his own suspicious activity reports, that he’s being watched.
“Under longstanding procedures, FinCEN will limit access to certain SARs when requested by law enforcement authorities in connection with an ongoing investigation,” Hudak said.
Prosecutions involving the disclosures of suspicious activity reports are rare, largely because misuse of the FinCEN database is rare. But some people who work with the database say the leaker will be identified and almost certainly charged.
“The leaker is taking an extraordinary personal risk for greater transparency,” said Duncan Levin, a former federal and state prosecutor who dealt extensively with the FinCEN database. “Whoever did this has added immeasurably to the public conversation and likely knows full well how much legal risk he or she is now facing.”
A former official with Chase Bank in California was convicted in 2011 of wrongfully disclosing a suspicious activity report of a customer suspected of committing mortgage fraud. According to evidence presented at his trial, Frank Mendoza, the bank official, suspected that a delinquent borrower who was behind on his mortgage loans may have been involved in fraud. In late 2008, the bank filed a suspicious activity report on the borrower.
In 2009, Mendoza approached the borrower, told him about the report that had been filed on him, and said a federal investigation into his business was likely. Then Mendoza made a proposal: pay him US$25,000 (RM99,459) and he could help make this problem go away.
The borrower instead went to the FBI, which allowed him to play along. After no payments came, Mendoza dropped his price to US$10,000, which the borrower paid in two installments. Mendoza was then arrested and charged. Following a one-week trial, a jury convicted him on three counts of bank bribery and one count of unlawfully disclosing a suspicious activity report.
The deliberations lasted 30 minutes. — Bloomberg