November 4, 2015

Former Employee of Federal Reserve Bank of New York Pleads Guilty in Manhattan Federal Court to Theft of Confidential Information from the Federal Reserve

Preet Bharara, the United States Attorney for the Southern District of New York, and Diego Rodriguez, Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the guilty plea of JASON GROSS to the theft of confidential information from the Federal Reserve Bank of New York (“FRBNY”). Between July and September of 2014, without authorization, GROSS took confidential information from the FRBNY, which related to the FRBNY’s supervision of banks, and that GROSS obtained during the course of his employment with the FRBNY, and sent that information to a former supervisor at the FRBNY (“Individual-1”) who was then employed at an investment bank headquartered in New York, New York. GROSS entered his guilty plea today before U.S. Magistrate Judge Gabriel W. Gorenstein.

According to the Information filed today and other statements made in Manhattan federal court:

The Federal Reserve System (“Federal Reserve”) fulfills several roles in the nation’s economy, including managing the nation’s money supply through monetary policy, supervising and regulating banking institutions, and generally overseeing the stability of the financial system. The Board of Governors of the Federal Reserve (the “Board”) is the Federal Reserve’s main governing body, and the FRBNY is one of the banks that is part of the Federal Reserve. Among other things, the FRBNY supervises and conducts examinations of banks that are members of the Federal Reserve and bank holding companies. Federal regulations protect the disclosure of certain “confidential supervisory information” (“CSI”) related to the Board’s and the FRBNY’s supervision of banks, including reports of examination of banks and information derived from, related to, or contained in such reports.

During the relevant time period, GROSS was employed by the FRBNY. GROSS’s responsibilities at the FRBNY included assisting with the supervision of certain banks. Prior to April of 2014, GROSS and Individual-1 had worked together at the FRBNY. From at least July 2014, up to September 2014, at the direction of Individual-1, who had left the FRBNY and begun to work at an investment bank headquartered in New York, New York (the “Investment Bank”), GROSS e-mailed documents containing CSI (the “Confidential Documents”) to Individual-1. GROSS sent the Confidential Documents, which he obtained during and through his employment at the FRBNY, to Individual-1 without authorization from the Board or the FRBNY. Upon receiving the Confidential Documents from GROSS, Individual-1 utilized certain of the Confidential Documents in an effort to further Individual-1’s employment at the Investment Bank. In particular, Individual-1 disseminated certain of the Confidential Documents to other Investment Bank employees for the purpose of assisting with the Investment Bank’s work for its client banks.

For example, on August 10, 2014, Individual-1 sent GROSS a text message asking GROSS to send to Individual-1 particular Confidential Documents regarding two banks (“Bank-1” and “Bank-2”). Individual-1 further asked GROSS to send the documents to Individual-1’s personal e-mail account. Thereafter, on August 19, 2014, GROSS sent one of the Confidential Documents (“Confidential Document-1”) from his personal e-mail account to the personal e-mail account of Individual-1. GROSS knowingly sent Confidential Document-1, which was labeled as confidential, to Individual-1 without authorization from the Board or the FRBNY. Confidential Document-1 related to the supervision of Bank-2, a bank that Individual-1 had previously been responsible for supervising when Individual-1 worked at the FRBNY. Notwithstanding that Individual-1 knew that Individual-1 was not entitled to receive or disseminate any Confidential Documents, Individual-1 sent Confidential Document-1 from Individual-1’s e-mail account at the Investment Bank to the e-mail accounts of other individuals employed by the Investment Bank. In a cover e-mail attaching Confidential Document-1, Individual-1 told these employees that, with respect to certain supervisory issues, Confidential Document-1 “gives you [an] idea of what [the] Board was looking at . . . Please don’t distribute.”

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GROSS, 37, of Bellmore, New York, pled guilty to one count of theft of government property the value of which property did not exceed $1,000 and faces a maximum sentence of one year in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge. GROSS is scheduled to be sentenced by U.S. Magistrate Judge Gabrielle W. Gorentstein on March 2, 2016.

Mr. Bharara praised the investigative work of the FBI and thanked the FRBNY and the Board for their support and assistance with the investigation.

This case is being handled by the Office’s Complex Frauds and Cybercrime Unit.Assistant U.S. Attorneys Drew Johnson-Skinner and Sarah E. Paul are in charge of the prosecution.