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What Happened to Michael Cohen’s Missing Bank Records?

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Among the mysteries surrounding Michael Cohen’s post-election windfall is how we came to learn of his influence-peddling operation in the first place. Last week, attorney Michael Avenatti—who has been grappling with Cohen in court over Donald Trump’s alleged affair with Stormy Daniels—incited a media frenzy when he released what appeared to be financial records showing that Cohen, Trump’s longtime lawyer, had received more than $1 million from companies with business interests involving the president, all of which were deposited into the same shell-company account that Cohen had used to pay off Daniels. The companies that had paid Cohen—including AT&T, Novartis, and a Korean aerospace company—quickly admitted to having hired him as a “consultant.” More curious, however, was where Avenatti’s information came from in the first place, and how news outlets were able to confirm its veracity. Some observers noted that the document resembled a “suspicious-activity report,” a highly sensitive memo that financial institutions are required to file when they are alerted to transactions that may be illegal.

On Wednesday night, we received an answer: The New Yorker reported that a law-enforcement official leaked the document—a SAR filed by First Republic Bank, where Cohen’s shell company, Essential Consultants LLC has an account—in part because of what it contained, but also due to what it did not. According to the official, two other SARs documenting Cohen’s questionable financial transactions, which reportedly total around $3 million, were missing from the database maintained by the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN. “I have never seen something pulled off the system . . . That system is a safeguard for the bank. It’s a stockpile of information. When something’s not there that should be, I immediately became concerned,” the official told reporter Ronan Farrow. “That’s why I came forward.”

For the anonymous official, the absence of the two other SARs suggested foul play. “Why just those two missing?” the official asked, seeming to imply that someone, somewhere, deliberately removed the documents from FinCEN’s system. When contacted by The New Yorker, FinCEN said in a statement that it shields the confidentiality of such reports “in order to protect both filers and potentially named individuals,” and that it “neither confirms nor denies the existence of purported SARs.” (Banks are required to file SARs if they observe activity “that resembles money laundering, fraud, and other criminal conduct,” according to the outlet, but they are not proof of criminal activity.)

Of course, there could be a much less sinister explanation for the forms’ absence. False or “highly sensitive” documents that require “strict limitations on access” might be transferred out of its master file, according to a record-retention policy on the FinCEN Web site. A former prosecutor who worked extensively with the Treasury Department database told The New Yorker she wasn’t sure precisely how access to SARs was restricted, but added that “because of the highly sensitive nature of a potential investigation . . . it may be that someone reached out to FinCEN to ask to limit disclosure of certain SARs related to an investigation, whether it was the special counsel or the Southern District of New York.” (Neither special counsel Robert Mueller’s office nor S.D.N.Y. responded to The New Yorker’s request for comment.)

In other words, the missing SARs aren’t proof that Cohen’s records have been expunged. As Benjamin Wittes, the editor-in-chief of Lawfare blog, pointed out, SARs originate from banks in the first place, which means that “when Bob Mueller or the S.D.N.Y. subpoenas the bank—as they surely have done already—for the records of all of Cohen’s transactions, those transaction records will still be there—and will be turned over.” Moreover, he wrote, “the bank surely still has records of the SARs themselves. So I doubt very much that there will be material data loss to Mueller or the S.D.N.Y. in any pending investigation even if there has been, in fact, some data loss within FinCEN.” It seems, however, that Farrow’s source felt compelled to make the public aware that the payments to Cohen that have come to light over the past week are merely a fraction of the whole. “Things that stand out as abnormal, like documents being removed from a system, are of grave concern to me . . . To say that I am terrified right now would be an understatement,” the official said. “This is a terrifying time to be an American, to be in this situation, and to watch all of this unfold.”



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