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Former Senior Fincen Employee Pleads Guilty To Conspiring To Unlawfully Disclose Suspicious Activity Reports

Natalie Mayflower Sours Edwards Illegally Repeatedly Transmitted SARs and Other Sensitive Government Information To A Reporter Resulting In Approximately 12 News Articles Over 1-Year Period. Former Senior Fincen Employee Pleads Guilty To Conspiring To Unlawfully Disclose Suspicious Activity Reports

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that NATALIE MAYFLOWER SOURS EDWARDS, a/k/a “Natalie Sours,” a/k/a “Natalie May Edwards,” a/k/a “May Edwards,” a former senior adviser at the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”), pled guilty today to conspiring to unlawfully disclose Suspicious Activity Reports (“SARs”). EDWARDS pled guilty before United States District Judge Gregory H. Woods.

U.S. Attorney Geoffrey S. Berman said: “As she has now admitted, Natalie Mayflower Sours Edwards, a former senior-level FinCEN employee, abused her position of trust by agreeing to repeatedly disclose highly sensitive information contained in Suspicious Activity Reports. Maintaining the confidentiality of SARs, which are filed by banks and other financial institutions to alert law enforcement to potentially illegal transactions, is essential to permit them to serve their statutory function, and the defendant’s conduct violated the integrity of that critical system and the law.”

According to the allegations contained in the Complaint, Information, publicly available information, court filings, and statements made during the plea proceeding:

The mission of FinCEN is to “safeguard the financial system from illicit use and combat money laundering and promote national security through the collection, analysis, and dissemination of financial intelligence and strategic use of financial authorities.”[1] Among other things, FinCEN manages the collection and maintenance of SARs regarding potentially suspicious financial transactions, which, under the Bank Secrecy Act (“BSA”), U.S. financial institutions and other parties are required by law to generate and deliver to FinCEN. Under the BSA and its implementing regulations, willful disclosure of a SAR or its contents by government employees or agents is a felony unless necessary to fulfill official duties.

Beginning in approximately October 2017, and lasting until her arrest in October 2018, EDWARDS agreed to and did unlawfully disclose numerous SARs to a reporter (“Reporter-1”), the substance of which were published over the course of approximately 12 articles by a news organization for which Reporter-1 worked (“News Organization-1”). The illegally disclosed SARs pertained to, among other things, Paul Manafort, Richard Gates, the Russian Embassy, Mariia Butina, and Prevezon Alexander. EDWARDS had access to each of the pertinent SARs and saved them – along with thousands of other files containing sensitive government information – to a flash drive provided to her by FinCEN.

She transmitted the SARs to Reporter-1 by means that included taking photographs or images of them and texting the photographs or images to Reporter-1 over an encrypted application. In addition to disseminating SARs to Reporter-1, EDWARDS sent or described to Reporter-1 internal FinCEN emails or correspondence appearing to relate to SARs or other information protected by the BSA, and FinCEN nonpublic memoranda, including Investigative Memos and Intelligence Assessments published by the FinCEN Intelligence Division, which contained confidential personal information, business information, and/or security threat assessments.

At the time of EDWARDS’s arrest, she was in possession of a flash drive on which she saved the unlawfully disclosed SARs, and a cellphone containing numerous communications over an encrypted application in which she transmitted SARs and other sensitive government information to Reporter-1.

* * *

EDWARDS, 41, of Quinton, Virginia, pled guilty to one count of conspiracy to make unauthorized disclosures of SARs, which carries a maximum sentence of five years in prison. EDWARDS is scheduled to be sentenced by Judge Woods on Tuesday, June 9, 2020 at 4:00 p.m. The maximum potential sentence is prescribed by Congress and is provided here for informational purposes only, as the sentence of the defendant will be determined by the judge.

Mr. Berman praised the investigative work of the Treasury Department’s Office of Inspector General and the Federal Bureau of Investigation.

This case is being prosecuted by the Office’s Public Corruption Unit. Assistant U.S. Attorneys Kimberly J. Ravener, Daniel C. Richenthal, and Maurene R. Comey are in charge of the prosecution.

Updated: 2-10-2020

Former Senior Fincen Employee,Former Senior Fincen Employee,Former Senior Fincen Employee,Former Senior Fincen Employee

FinCEN: Social Media Crypto Projects Can’t Ignore Money Laundering Risk

The deputy director of the United States Financial Crimes Enforcement Network (FinCEN) says the cryptocurrency sector must not abet a “slide backward” in money laundering prevention.

FinCEN deputy director Jamal El-Hindi made his remarks during a speech at the Securities Industry and Financial Markets Association 20th Anti-Money Laundering (AML) and Financial Crimes Conference in New York City on Feb. 6.

FinCEN Won’t Allow AML Oversight To “Slide Backward”

El-Hindi opened his speech noting the particular complexity of the securities and futures industry, which comprises a dense web of transactions and interactions between inter-related parties.

This “amazingly complex” landscape includes but is not limited to primary brokerages, futures commission merchants, executing dealers, transfer agents, clearing firms and mutual funds, he observed.

This complexity, he suggested, presents a challenge to the transparency — the information collection and due diligence processes — needed to tackle money laundering and prevent financial crimes.

In many cases, information sharing and Know Your Customer processes may be discouraged due to the highly competitive nature of the industry — just 14% of all entities in the securities sector that are eligible to register for one of the key business-to-business information sharing mechanisms choose to do so, he noted.

Within this highly challenging climate, El-Hindi warned that new technologies may further exacerbate the situation.

Cryptocurrency-curious social media and messaging platforms — the most high-profile of which is Facebook’s Libra project — must meet the same compliance responsibilities as traditional financial sector actors, he stressed:

“Social media and messaging platforms and others now focusing on the establishment of cryptocurrencies cannot turn a blind eye to illicit transactions that they may be fostering.”

The influence of these private sector actors, and the new technology heralded by cryptocurrencies, carries these same responsibilities back into traditional finance:

“To the extent that the financial sector chooses to move forward with […] these emerging systems […] we are not going to allow it to slide backward on the protections and appropriate transparency that we have collectively worked so hard to weave into the financial system.”

Steps Forward

In early December, FinCEN’s director, Kenneth A. Blanco, claimed that the cryptocurrency industry has increasingly begun to fall in line with the agency’s regulations on money transmission services.

In particular, he pointed to FinCEN’s May 2019 guidance as having a marked and positive impact on the agency’s oversight of the crypto space.

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