On February 28, 2019, in the Northern District of California, Internal Revenue Service (IRS) employee John C. Fry was indicted for the unauthorized disclosure of Suspicious Activity Reports (SARs), misuse of a Government computer, and misuse of a Social Security Number (SSN) in violation of the law.
According to the court documents, Fry is an investigative analyst for IRS Criminal Investigation (IRS-CI) in San Francisco, California, and has worked for the IRS since 2008. In this position, he had access to various law enforcement databases, including the Financial Crimes Enforcement Network (FinCEN) and Palantir, which is analytic software used by IRS-CI. FinCEN manages the collection and maintenance of SARs, which financial institutions are required to generate under the Bank Secrecy Act to report potentially suspicious financial transactions. The disclosure of a SAR or its contents is unlawful, and employees or agents of Government authorities are prohibited from disclosing a SAR, or any information that would even reveal the existence of a SAR, except as necessary to fulfill official duties.
By virtue of his position as an investigative analyst, Fry intentionally exceeded authorized access to a computer and obtained information regarding SARs that was not necessary to fulfill his official duties. Further, between about May 4, 2018 and May 14, 2018, Fry knowingly disclosed the SARs by verbally describing and electronically sending images of the SARs to Newport Beach, California, attorney Michael Avenatti.
Specifically, on May 4, 2018, Fry conducted numerous searches from his work computer in the Palantir database that related to Michael Cohen and his business, Essential Consultants, LLC. During this access, Fry obtained and downloaded five SARs. Immediately after downloading the five SARs, Fry placed two outgoing phone calls to a number associated with Avenatti. Fry then logged into the FinCEN database from his work computer and conducted additional searches related to Michael Cohen, including searches using Cohen’s driver’s license and personal bank account numbers, as well as several business bank account numbers. On May 7, 2018, Fry again conducted searches in the FinCEN database, this time using Cohen’s SSN and the term Essential Consultants, among other things, and later that day, placed another call to Avenatti.
On May 8, 2018, Avenatti circulated a dossier on his public Twitter account releasing the confidential banking information related to Cohen and his company, Essential Consultants. On May 8, 2018, The Washington Post published an article that discussed in detail claims about Cohen’s banking history made public in Avenatti’s dossier. On May 12, 2018, Fry placed an outgoing call to a number later identified as being associated with a reporter. On May 16, 2018, The New Yorker published an article written by this reporter titled, “Missing Files Motivated the Leak of Michael Cohen’s Financial Records.” The article reported that the source, identified only as a law enforcement officer, grew alarmed after being unable to find two important SARs regarding Cohen’s financial activity. In fact, access to the two SARs in question had been restricted and they were not available to all FinCEN users.
Fry confessed to verbally providing SAR information to Avenatti and to sending Avenatti a screenshot of the narrative. Fry indicated the reporter had contacted him (Fry) to verify the information supplied to the reporter by Avenatti.
If convicted, Fry could face a maximum of five years’ imprisonment for each violation.
Source: The facts in this case narrative come from the following publicly available documents: N.D. Cal. Crim. Compl. filed Feb. 4, 2019; N.D. Cal. Indict. filed Feb. 28, 2019.