SAN FRANCISCO - John C. Fry pleaded guilty to illegally disclosing information from Suspicious Activity Reports (SARs), announced United States Attorney David L. Anderson, Financial Crimes Enforcement Network (FinCEN) Director Kenneth A. Blanco, and United States Department of the Treasury, Treasury Inspector General for Tax Administration (TIGTA), Special Agent in Charge Rod Ammari.  The plea agreement was accepted by the Honorable Edward M. Chen, United States District Judge.

In May of 2018, Fry, 54, of San Francisco, was an Investigative Analyst for the Internal Revenue Services’ law enforcement arm, the Criminal Investigation Division.  Fry’s responsibilities included supporting IRS Agents in the Northern District of California area and reviewing SARs for activity that could potentially lead to a criminal investigation.  In his position with the IRS, he had access to various law enforcement databases, including the FinCEN database that manages the collection and maintenance of SARs and an analytic software used to integrate investigative data from multiple internal and external data sources. According to his plea agreement, he admitted he knowingly and willingly disclosed confidential SAR information to Michael Avenatti.  

"Financial institutions trust that FinCEN will safeguard the sensitive information like SARs they are obligated to file, which is absolutely critical to protecting our national security” said FinCEN Director Blanco. “We take seriously our responsibility to protect this information, and we will not hesitate to investigate and help prosecute anyone who breaks the law by disclosing or misusing protected data.”

“When an IRS employee accesses and misuses government data, and then discloses that data for personal reasons, their selfish actions erode confidence in the IRS and in the institutions that are tasked with protecting this data,” said Special Agent in Charge Ammari.  “The Treasury Inspector for Tax Administration, along with our law enforcement partners, are committed to prosecuting these individuals to the fullest extent to deter illegal disclosures in the future.”

According to the plea agreement, Fry admitted that on May 4, 2018, he logged onto the a private government database from his work computer and downloaded five SARs related to Michael Cohen and his company Essential Consultants.  Fry further admitted he twice called Michael Avenatti, an attorney based in Newport Beach, Calif., from his personal cell phone.  Fry acknowledged that during his phone conversations with Avenatti, he verbally provided information to Michael Avenatti that was contained in the five SARs.  Fry further admitted that he used one of his personal email accounts to email screenshots of the SARs to Michael Avenatti.  

Further, Fry admitted that on May 7, 2018, he logged on to the FinCEN database from his work computer and conducted additional searches related to Michael Cohen and Essential Consultants.  He then called Michael Avenatti from his personal cell phone and verbally provided information contained in the searches.  Fry admitted he had no official reason to disclose SAR records related to Cohen or the various companies listed in the SARs.

On February 28, 2019, a federal grand jury indicted Fry with one count of unauthorized disclosure of suspicious activity reports, in violation of 31 U.S.C. § 5322(a); two counts of misuse of a computer, in violation of 18 U.S.C. § 1030(a)(2); and one count of illegal use of a social security number, in violation of 42 U.S.C. § 408(a)(8).  Fry pleaded guilty to the unauthorized disclosure count.  If Fry complies with the plea agreement, the remaining counts will be dismissed at sentencing.

Judge Chen scheduled Fry’s sentencing for December 18, 2019.  Fry faces a maximum sentence of 5 years in prison, and a fine of $250,000, for the violation.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

This case is being prosecuted by the Special Prosecutions Section of the United States Attorney’s Office for the Northern District of California.  This case was investigated by FinCEN and TIGTA.

 

SAN FRANCISCO - A federal grand jury in San Francisco indicted John Fry today for illegally disclosing information from Suspicious Activity Reports, misusing his computer, and illegally using a social security number, announced United States Attorney David L. Anderson and United States Department of the Treasury, Treasury Inspector General for Tax Administration (TIGTA), Special Agent in Charge Rod Ammari.

According to the indictment and a previously unsealed criminal complaint, Fry, 54, of San Francisco, unlawfully accessed and disclosed Suspicious Activity Reports (SARs) and SAR information pertaining to an individual taxpayer and a company owned by the taxpayer.  Fry was an Investigative Analyst for the IRS’s law enforcement arm, the Criminal Investigation Division, in San Francisco.  In this position, Fry had access to various law enforcement databases including the Financial Crimes Enforcement Network (FinCEN), Palantir, and the Integrated Data Retrieval System.  

The TIGTA investigation revealed that in May 2018, Fry logged on to FinCEN and Palantir from his work computer and conducted numerous searches related to the taxpayer who was a New York attorney.  Fry then disclosed the SAR information to an attorney based in Newport Beach, Calif.  On May 8, 2018, the attorney used a public Twitter account to circulate a dossier releasing confidential banking information related to the taxpayer and the taxpayer’s company.  The SAR information that was passed to the Los Angeles attorney was published in the Washington Post on May 8, 2018.  The Los Angeles attorney put Fry in contact with an investigative reporter in New York which led to confirmation of the confidential banking information and an interview, which was published in The New Yorker on May 16, 2018. 

The indictment charges Fry with violations of 31 U.S.C. § 5322(a), unauthorized disclosure of suspicious activity reports; 18 U.S.C. § 1030(a)(2), misuse of a computer; and 42 U.S.C. § 408(a)(8), illegal use of a social security number.  An indictment merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt.  If convicted, the defendant faces a maximum sentence of 5 years imprisonment, and a fine of $250,000, for each violation.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.   

Fry was previously arraigned on a criminal complaint and released on a $50,000 bond.  Fry’s next scheduled appearance is at 9:30 a.m. on March 13, 2019, for arraignment on the indictment before the Honorable Joseph Spero, U.S. Magistrate Judge.      

 

SAN FRANCISCO - A federal criminal complaint, filed on February 4, 2019, was unsealed in San Francisco today, charging John C. Fry with unlawful disclosure of Suspicious Activity Reports, announced United States Attorney David L. Anderson and United States Department of the Treasury, Treasury Inspector General for Tax Administration (TIGTA), Special Agent in Charge Rod Ammari. 

According to the affidavit filed in support of the complaint, Fry, 54, of San Francisco, unlawfully accessed and disclosed Suspicious Activity Reports (SARs) and SAR information pertaining to an individual taxpayer and a company owned by the taxpayer.  Fry was an Investigative Analyst for the IRS’s law enforcement arm, the Criminal Investigation Division, in San Francisco.  In this position, Fry had access to various law enforcement databases including the Financial Crimes Enforcement Network (FinCEN), Palantir, and the Integrated Data Retrieval System.  

The TIGTA investigation revealed that in May 2018, Fry logged on to FinCEN and Palantir from his work computer and conducted numerous searches related to the taxpayer who was a New York attorney.  Fry then disclosed the SAR information to an attorney based in Newport Beach, Calif.  On May 8, 2018, the attorney used a public Twitter account to circulate a dossier releasing confidential banking information related to the taxpayer and the taxpayer’s company.  The SAR information that was passed to the Los Angeles attorney was published in the Washington Post on May 8, 2018.  The Los Angeles attorney put Fry in contact with an investigative reporter in New York which led to confirmation of the confidential banking information and an interview, which was published in The New Yorker on May 16, 2018. 

The criminal complaint charges Fry with violating 31 U.S.C. § 5322(a), which prohibits unauthorized disclosure of information from SARs.  Fry appeared before the U.S. Magistrate Judge Laurel Beeler in federal court in San Francisco on February 21, 2019.  He was released on a $50,000 bond.  Fry’s next scheduled appearance is scheduled for March 13, 2019, at 9:30 am, before U.S. Magistrate Judge Joseph C. Spero for preliminary hearing or arraignment on indictment.

A complaint merely alleges that crimes have been committed, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt. If convicted, the defendant faces a maximum sentence of five years and a fine of $250,000 for a violation of 31 U.S.C. § 5322.  However, any sentence following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.  

The U.S. Attorney’s Office, Special Prosecutions/National Security Unit, is prosecuting the case.  The prosecution is the result of an investigation by the TIGTA.