HomeAML Whistleblower Reform Bill Passes House Committee

AML Whistleblower Reform Bill Passes House Committee

Geoff Schweller
Published On: June 22nd, 2022Categories: Anti-Money Laundering, Whistleblower News and Qui Tam Blog

On June 22, the U.S. House Committee on Financial Services voted unanimously by voice to approve H.R. 7195, a bill amending the whistleblower provisions of the Anti-Money Laundering Act of 2020 (AML Act). The AML Act established a whistleblower award program for money laundering whistleblowers but major loopholes have undermined the program. H.R. 7195 closes these loopholes.

“This bipartisan, bicameral legislation provides a proven solution to improving the whistleblower fund of the Financial Crimes Enforcement Network (FinCEN),” said Representative Alma Adams (D-NC) the principal sponsor of the bill. “FinCEN’s whistleblower fund was designed to pay awards to the brave souls who too often risk their livelihoods and their lives to report criminal wrongdoing that they witness. Unfortunately, we have found that FinCEN’s award model which we implemented in 2020 AMLA has been so far insufficient to meet the statutory requirements. So I’m proud to say this legislation brings FinCEN’s fund in line with other successful funds currently operating in the federal government and will substantially aid FinCEN as it executes its Congressionally directed mission.”

H.R. 7195 addressed two major shortcomings with the AML Act. First, the bill adds a required statutory minimum award of 10%. Currently, there is no minimum award guarantee, meaning that all whistleblower awards through the program are discretionary. Discretionary award programs have proven to be ineffective at properly incentivizing whistleblowing.

“This bicameral, bipartisan legislation will strengthen our whistleblower programs to combat money laundering and provide law enforcement information to better protect our country,” added Representative Anthony Gonzalez (R-OH). “This bill will make sure that whistleblowers receive at least 10% of the value of fines collected from their willingness to speak out compared to current law which has no minimum award. We should be doing more to incentivize whistleblowers to come forward and ensure that they are awarded for their bravery and commitment to justice.”

H.R. 7195 also establishes a fund modeled off those created by the Dodd-Frank Act which pays whistleblower awards financed entirely through sanctions collected in enforcement actions brought by whistleblowers. 

Since the AML Act was passed in January 2021, Kohn, Kohn & Colapinto founding partner Stephen M. Kohn has championed the need for reforms to the law, writing numerous pieces on the issue. As Chairman of the Board of the National Whistleblower Center (NWC), Kohn also played a key role in a number of letters sent to Congress in support of reforms.

At the hearing, Committee Chair Representative Maxine Waters (D-CA) highlighted NWC’s advocacy. “According to the National Whistleblower Center,” Waters stated, “‘It is highly unlikely that persons with relevant information relating to illegal money laundering and financing terrorism will risk their livelihoods, reputations and the potential of high litigation costs without reasonable financial assurances.’”

H.R. 7195 will next proceed to the House floor for a vote. A companion bill has been introduced in the Senate by Senators Chuck Grassley (R-IA) and Raphael Warnock (D-GA).

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