Treasury Department Adviser Pleads Not Guilty in Leak Case

(Bloomberg) -- A Trump Administration crackdown on unauthorized leaks of confidential government information may just be getting started.

During the arraignment of a senior Treasury Department adviser Wednesday on charges that she gave a journalist confidential bank records about suspicious transactions, including some involving former Trump campaign officials Paul Manafort and Rick Gates, federal prosecutors indicated more charges may be filed within two to three months -- either against the adviser or other people.

“That is possible,” Assistant U.S. Attorney Kimberly Jane Ravener said in response to a question from U.S. District Judge Gregory H. Woods. “The investigation is continuing.”

Natalie Mayflower Sours Edwards, 40, of Quinton, Virginia, pleaded not guilty to making unauthorized disclosures of suspicious activity reports and conspiracy. Edwards had been in talks with prosecutors and waived her right to have her case presented to a grand jury, which often indicates that a defendant is about to plead guilty. But one of her attorneys, Jacob Kaplan, said outside the courtroom that there are no active discussions.

"Today’s not guilty plea is another step in Mrs. Edwards’s principled commitment to defend these charges," Kaplan and Marc Agnifilo, another of Edwards’s lawyers, said in a statement. "She is not the first person to be prosecuted for doing the right thing, and she is steadfast in seeing this matter to the end."

Edwards’s arrest in October signaled an escalation in a crackdown on unauthorized leaks to the news media. President Donald Trump has blasted leakers in his postings on Twitter, and a senior Treasury Department official said at the time of Edwards’s arrest that the charges indicated the government will prosecute violations of the Bank Secrecy Act involving disclosure of confidential information.

Edwards, a former adviser at the department’s Financial Crimes Information Network, or FinCEN, is accused of leaking Suspicious Activity Reports to a journalist from October 2017 until her arrest. Prosecutors didn’t identify the journalist or news organization, but articles cited in court papers were written by reporters at BuzzFeed.

Under the Bank Secrecy Act, financial institutions are required to report suspicious transactions, such as payments of more than $10,000 or those made to entities blacklisted by the department.

FinCEN Files

Prosecutors said Edwards began talking to the reporter in July 2017 and saved thousands of FinCEN files, leaking information about payments involving Manafort, the former Trump campaign chairman, as well as transactions linked to Gates, the campaign’s one-time deputy manager. The leaks also included information about Russia’s Prevezon Holdings Ltd., which was tied to money laundering, and Maria Butina, a Russian gun enthusiast who admitted to acting as an undisclosed agent.

Edwards, who remains free on $100,000 bail, comes from a family of public servants and believes she was doing her "civic duty" when she leaked the documents, Agnifilo said after a court appearance in New York in November.

Prosecutors said she had a flash drive containing SARs, and a phone that contained encrypted communications with the reporter, when she was arrested and confessed to leaking the documents. She denied she knew the material would be published and claimed to have been a whistle-blower who provided the reports for record-keeping purposes.

The first person prosecuted by the administration for leaking, former government contractor Reality Winner, was accused of giving a top-secret report on Russian hacking to The Intercept. She pleaded guilty to unlawful retention and transmission of national defense information and was sentenced in August to more than five years in prison. Court filings have hinted that others may face charges, as prosecutors said that Edwards’s boss also communicated with the reporter.

Kaplan said that while the facts are not in dispute, the case is not "not as simple as the government makes it seem." He said an attractive plea offer may not even be enough to convince his client to avoid a trial.

“I’m not even sure that would do it,” Kaplan said. “We look forward to defending the case.”

The case is U.S. v Edwards, 18-mj-8861, U.S. District Court, Southern District of New York (Manhattan).

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