An Internal Revenue Service employee has been charged with leaking confidential government reports that described financial transactions made by President Donald Trump’s former lawyer Michael Cohen, according to court documents unsealed Thursday.
John Fry, an investigative analyst with the IRS in San Francisco, was charged with the unauthorized disclosure of suspicious activity reports, or SARs. Such reports are meant to flag potentially unlawful financial conduct to government investigators but do not necessarily indicate wrongdoing.
According to the documents, unsealed in federal court in San Francisco, Fry is accused of sharing the reports’ contents with Michael Avenatti, a lawyer who rose to national prominence representing adult-film actress Stormy Daniels in litigation arising from her claims of a sexual encounter with Trump more than a decade ago. Cohen pleaded guilty last year to arranging hush-money payments to Daniels and another woman who alleged affairs with Trump.
Fry’s lawyer did not immediately respond to a request for comment. Court records show he appeared briefly in court Thursday and was released on a $50,000 bond. Court records do not show a plea was entered.
Avenatti, who made the information public by posting it on social media, did not immediately respond to a message seeking comment. He said on Twitter that he did nothing wrong.
A lawyer for Cohen declined to comment.
Fry’s case marks the second time in recent months that a government employee has been charged with disclosing suspicious activity reports related to suspects in special counsel Robert Mueller III’s investigation. Mueller is investigating Russian interference in the 2016 U.S. election, as well as Trump’s conduct.
In October, the Justice Department charged a senior Treasury Department official with providing a journalist the details of SARs involving financial transactions connected to former Trump campaign chairman Paul Manafort and other associates of the president.
The new case cites reporting by The Washington Post and the New Yorker, and alleges Fry was the root source of information for those stories.
Authorities say that on May 4 Fry used his access to a government database to look up five SARs on Cohen and called Avenatti “immediately after downloading” the documents.
A May 8 article published by The Post, based on information provided by Avenatti, traced the flows of money into and out of Essential Consultants, a limited liability company Cohen used in part to arrange a hush-money payment for Daniels during the 2016 election campaign.
That transaction led to Cohen’s guilty plea for violating campaign finance law. He also pleaded guilty to other crimes, and is due to testify publicly to Congress next week before heading to prison in early March.
Cohen is scheduled to appear for a private hearing Tuesday before the Senate Intelligence Committee, his lawyer confirmed. He also is set to provide public testimony Wednesday before the House Oversight Committee and then additional private testimony Thursday with the House Intelligence Committee.
Four days after The Post’s story was published, according to the criminal complaint, Fry allegedly placed a call to Ronan Farrow, a reporter for the New Yorker. Later that month, Farrow wrote a story about an unidentified law enforcement official who shared the SARs because he had grown alarmed after being unable to locate two such documents regarding Cohen in a government database.
A New Yorker spokeswoman declined to comment.
Within the Treasury Department, officials sometimes remove SARs related to high-profile or sensitive cases out of the searchable databases, to prevent officials without a direct role in the case from casually looking at the information, according to court documents.
The criminal complaint alleges that Fry had no valid work-related reason to be looking at SARs involving Cohen. By conducting a search of Fry’s phone, investigators obtained WhatsApp text messages between Fry and Farrow during the time period in question, according to the criminal complaint.
The charging document said that Fry confessed when confronted by federal agents in November.
“Fry confessed to verbally providing SAR information to Avenatti. Fry also admitted that he sent Avenatti a screenshot of the narrative. Fry stated that Reporter-1 (Farrow) contacted him to verify the information supplied to Reporter-1 by Avenatti,” the complaint said.
After Fry was charged, Avenatti said on Twitter: “Neither I nor R. Farrow did anything wrong or illegal with the financial info relating to Cohen’s crimes… And if we did (we didn’t), then every reporter in America would be jailed and unable to do their job.”
The Washington Post’s Matt Zapotosky contributed to this report.