IRS leaker who outed Michael Cohen’s banking secrets is spared jail time

A former Internal Revenue Service analyst persuaded a judge not to send him to prison for leaking confidential government records on suspicious banking activity by President Donald Trump’s former lawyer Michael Cohen.

John C. Fry, who worked in the IRS’s law enforcement arm in San Francisco, pleaded guilty to illegally disclosing records from a Treasury Department database showing that a shell company linked to Cohen (pictured) had received millions of dollars from multinational companies that were trying to get access to the Trump White House, as well as $500,000 from a company tied to a Russian oligarch.

After Fry privately shared the information in 2018 with Michael Avenatti, the California lawyer who sparred publicly with Trump for months, the reports on Cohen’s transactions wound up on Twitter, triggering a media frenzy. A San Francisco federal judge sentenced Fry Wednesday to five years of supervised probation and ordered him to pay a $5,000 fine.

Fry is the second federal official this week to express remorse to a federal judge for making unauthorized disclosures from Treasury’s Financial Crimes Information Network, or FinCEN, which probes money laundering by studying data about financial transactions.

A senior Treasury adviser pleaded guilty to giving a journalist so-called Suspicious Activity Reports from the database involving one-time Trump campaign chairman Paul Manafort and others. Natalie Mayflower Sours Edwards is set to be sentenced June 9 in Manhattan federal court.

Fry “made a onetime mistake within a lifetime of good,” his lawyer, Gail Shifman, wrote in a court filing seeking leniency from U.S. District Judge Edward Chen.

Prosecutors recommended that Fry, 55, spend three months in prison and pay a $10,000 fine. They argued in a memo that Fry set aside his “training and experience, and committed crimes in violation of the law he was sworn to uphold.”

While Cohen sought more than $14 million in restitution from Fry, the government said Cohen failed to show he or his business were harmed. The judge agreed.

The case is U.S. v. Fry, 19-0102, U.S. District Court, Northern District of California (San Francisco).

Bloomberg News