Treasury employee charged with leaking financial info on Trump team was arrested with flash drive in hand, prosecutors say
The top Treasury Department employee who was charged Wednesday with leaking confidential financial documents pertaining to former Trump officials was apprehended the previous evening with a flash drive containing the allegedly pilfered information in her hand, prosecutors said in court papers.
The dramatic arrest late Tuesday came on the heels of other high-profile, leak-related prosecutions under the Trump administration, which has pledged to go on the offensive against leakers that the president has called "traitors and cowards."
Natalie Mayflower Sours Edwards, 40, a senior official at the department's Financial Crimes Enforcement Network (FinCEN), is accused of illegally giving a reporter bank reports documenting several suspicious financial transactions, known as Suspicious Activity Reports (“SARs”), from October 2017 to the present.
The financial transactions involved Trump campaign chief Paul Manafort, campaign official Richard Gates, accused Russian agent Maria Butina and the Russian Embassy, federal law enforcement officials said Wednesday.
An unidentified, higher-ranking Treasury colleague was cited in court papers as a co-conspirator with Edwards, but was not charged. That person, identified only as an "associate director" at FinCEN to whom Edwards reported, exchanged more than 300 messages with a reporter via an encrypted messaging application.
Edwards saved thousands of SARs, "along with thousands of other files containing sensitive government information," to a government-provided flash drive, prosecutors said. She transmitted the SARs to the reporter by "taking photographs of them and texting the photographs" using an encrypted application, according to charging documents, which said Edwards eventually confessed to doing so. FBI agents obtained a pen register and trap and trace order for Edwards' cellphone during their investigation.
The files were allegedly saved to a folder on the flash drive with the file path "Debacle\Emails\Asshat."
"Edwards is not known to be involved in any official FinCEN project or task bearing these file titles or code names," federal authorities said.
The flash drive contained not only SARs, but also "highly sensitive material relating to Russia, Iran, and the terrorist group known as the Islamic State of Iraq and the Levant," prosecutors said.
During her interviews with FBI agents, Edwards initially denied any contact with the news media, and called herself a "whistleblower" who saved the SARs for "record-keeping," according to the criminal complaint. Prosecutors said Edwards had previously filed an unrelated whistleblower complaint, and had been in touch with congressional staffers regarding that complaint.
The journalist's name Edwards allegedly spoke with was not disclosed in court papers. But the documents list about a dozen stories published by Buzzfeed News over the past year-and-a half, including an article headlined, "GOP Operative Made 'Suspicious' Cash Withdrawals During Pursuit of Clinton Emails." Another article was titled, "These 13 Wire Transfers Are A Focus of the FBI Probe Into Paul Manafort."
The most recent Buzzfeed article cited in the charging documents was published on Monday.
"A review to date, pursuant to a judicially-authorized search warrant executed today, of Edwards' personal cellphone has revealed that the cellphone contains the substance of many of these communications, including ... communications in which Edwards transmitted or described" SARs to a reporter, FBI Special Agent Emily Eckstut wrote in an arrest warrant application submitted Tuesday.
"At the time she was questioned, Edwards was also in possession of a flash drive that appeared to be the same drive on which she saved the SARs," Eckstut added. A spokesman for Buzzfeed declined to comment.
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The case is apparently the first criminal prosecution arising from leaks about individuals targeted by Special Counsel Robert Mueller's team in the course of its Russia investigation. Manafort was found guilty earlier this year of various bank and tax crimes; his associate, Gates, pleaded guilty.
In a hearing Wednesday afternoon, federal magistrate judge Theresa Buchanan released Edwards, subject to the custody of her parents. She and her parents also signed a $100,000 bond as part of her release. Edwards, who appeared in court wearing street clothes, faces two charges (one for unlawful disclosure and one for conspiring to unlawfully disclose), each one carrying a maximum sentence of five years and a $250,000 fine. She is due back in court Nov. 2.
Edwards is currently on administrative leave at Treasury, FinCen spokesman Steve Hudak said.
Banks must file the suspicious activity reports with the Treasury Department when they spot transactions that raise questions about possible financial misconduct such as money laundering, but federal law strictly limits their disclosure.
"Today's action demonstrates that those who fail to protect the integrity of government information will be rightfully held accountable."
Over the summer, senators flagged an apparent leaking problem at the Treasury Department that they said raised "serious" concerns. In a letter sent in June, Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, requested that Treasury Department Inspector General Eric Thorson investigate the apparent leak of a confidential request for SARs that Senate investigators had made to the Treasury Department as part of their probe into election interference.
The Senate Judiciary Committee made the confidential request in a letter in September 2017, and the letter was described publicly in media reports the next month.
“If an official at the Treasury Department leaked the letter in an attempt to obstruct a Congressional investigation, that would be a serious matter," Grassley wrote. "There is some indication this may be a recurring problem. While I do not know if there is any connection, I note that there have been other stories relying on Treasury officials who were unauthorized to speak to the media and detailing another Committee’s requests for SARs relating to its Russia investigation. I also understand that your office has opened an investigation into the apparent leak of SARs related to Michael Cohen to Michael Avenatti.”
Edwards has not been charged in that apparent leak, and there are no indications that she or her unidentified alleged co-conspirator at the Treasury Department were involved in it.
“In her position, Edwards was entrusted with sensitive government information. As we allege here today, Edwards violated that trust when she made several unauthorized disclosures to the media,” FBI Assistant Director-in-Charge William F. Sweeney Jr. said in a statement. “Today's action demonstrates that those who fail to protect the integrity of government information will be rightfully held accountable for their behavior.”
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Geoffrey Berman, the U.S. attorney in Manhattan, where the criminal complaint was filed, said Edwards "betrayed her position of trust by repeatedly disclosing highly sensitive information." Edwards also sent the reporter internal Treasury Department emails, investigative memos and intelligence assessments, prosecutors allege.
U.S. v. Natalie Edwards Complaint by Fox News on Scribd
According to court papers, federal investigators obtained a court order to monitor the calls to and from the cellphone of the unnamed associate director who allegedly conspired with Edwards. That monitoring captured the frequency of contacts with the reporter via the encrypted messaging application.
Court papers do not detail the contents of those messages. "Protecting sensitive information is one of our most critical responsibilities, and it is a role that we take very seriously," said Sigal Mandelker, the Treasury Department's undersecretary for terrorism and financial intelligence.
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The prosecution is the latest in a series of leak-related prosecutions brought by the Trump administration, which has vowed to combat unauthorized disclosures. Earlier this year, President Trump said that "leakers are traitors and cowards," and he vowed that "we will find out who they are!”
Edwards' arrest comes after a former security director for the Senate Intelligence Committee pleaded guilty to one count of giving a false statement to FBI agents looking into leaks of national security information to several reporters -- including one now at the New York Times whom he dated before she joined the paper.
James Wolfe, who served as the Senate panel's security director, lied to the FBI in December 2017 about contacts he had with three reporters, according to a statement of offense released Monday as part of his guilty plea. He also allegedly lied about giving two reporters non-public information about committee matters. His guilty plea on Monday to one count means that the other two counts against him will be dismissed.
And, just weeks ago, once-secret text messages revealed that anti-Trump ex-FBI officials Peter Strzok and Lisa Page had discussed a “media leak strategy” amid the Russia probe. Strzok and former FBI Deputy Director Andrew McCabe were both fired for their conduct during that probe.
"I had literally just gone to find this phone to tell you I want to talk to you about media leak strategy with DOJ before you go," Strzok texted Page on April 10, 2017, according to Meadows, who cited newly produced documents from the Justice Department.
On April 22, Strzok wrote, "article is out! Well done, Page," and on April 12 he told her that two negative articles about Page's "namesake" would soon come out, according to Meadows. That was an apparent reference to Carter Page, the former Trump adviser whom the FBI surveilled for months after obtaining a warrant from the Foreign Intelligence Surveillance Act (FISA) court.
Republicans have charged that the FBI provided misleading or inaccurate information to the FISA court to obtain the warrant. In particular, the FBI incorrectly suggested to the FISA court that a Yahoo News article provided an independent basis to monitor Page, when that article relied on the same source the FBI had cited earlier: ex-spy Christopher Steele, who worked for a firm hired by the Democratic National Committee (DNC) and the Hillary Clinton campaign.
Page on Monday announced he was suing the DNC and other entities for allegedly spreading false and defamatory reports about his supposed dealings with Russians.
“There have been so many lies, and look at the damage it did to our democratic systems and our institutions of government back in 2016," Page told Fox News' "Hannity" this week. "And I’m just trying to get some justice."
Fox News' Jake Gibson, Adam Shaw, and The Associated Press contributed to this report.