AML Whistleblower Program Rewards for Reporting BSA and Sanctions Violations
Modeled off the highly successful SEC and CFTC Whistleblower Programs, the AML Whistleblower Program offers monetary awards and anti-retaliation protections to whistleblowers who report money laundering violations.
By Joseph Orr
Updated: September 20, 2023
In 2021, the U.S. established the AML Whistleblower Program as part of the Anti-Money Laundering Act of 2020. Modeled off the highly successful SEC and CFTC Whistleblower Programs, the AML Whistleblower Program offers monetary awards and anti-retaliation protections to whistleblowers who report money laundering violations.
Administered by the Financial Crimes Enforcement Network (“FinCEN”) of the Department of Treasury, the program provides mandatory rewards to qualifying whistleblowers that result in successful enforcement actions of the Bank Secrecy Act (BSA), the primary AML enforcement law. Key features of the program include:
Eligible whistleblowers are entitled to a monetary award of 10-30% of the monetary sanctions collected in an enforcement action based on their information.
Whistleblowers must voluntarily provide information about BSA or sanctions violations.
Whistleblowers can be insiders or have independent knowledge of violations.
The AML whistleblower program also covers wrongdoing prior to its creation, that are within the statute of limitations for government enforcement actions.
A whistleblower can now submit information about any possible violation of the BSA and its regulations and any violations of sanctions laws.
The statute of limitations for the BSA is five years for criminal penalties under 18 U.S.C § 3282(a) and six years for BSA civil actions under 31 U.S.C. § 5321(b).
Enforcement of the Bank Secrecy Act claim under the AML Whistleblower Program
The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) and Office of Foreign Assets Control (OFAC) are responsible for administering the BSA and sanctions laws. These two entities work closely with other U.S. federal agencies, such as the SEC, CFTC, and DOJ, to ensure compliance and enforce violations.
FinCEN has extensive investigative authority and can pursue enforcement actions for monetary penalties and other civil remedies in federal court or administrative proceedings.
OFAC, on the other hand, is responsible for overseeing and implementing the regulations that dictate the terms and conditions under which companies and individuals can engage in business with sanctioned entities and controls.
Other violations covered under the AML Whistleblower Program:
In addition to covering whistleblowers who report violations of the Bank Secrecy Act, the AML Whistleblower Program covers disclosures on potential violations of a number of related laws concerning money laundering and related misconduct. These include:
International Emergency Economic Powers Act (50 U.S.C. § 1701 et seq.)
Trading with the Enemy Act (50 U.S.C. § 4305, 4312)
Under the AML Whistleblower Program, whistleblowers may also report violations of U.S. sanctions. The law explicitly covers whistleblowers who report hidden assets, bank accounts, or property held by sanctioned entities or individuals in the United States and other countries.
Whistleblowers reporting sanctions busting under the AML law are offered the same protections and are entitled to the same awards as those reporting money laundering.
While the law broadly covers all sanctions requirements, the ability to use this law immediately to enforce all of the financial restrictions placed on Russia after the invasion of Ukraine was a driving force behind the sanctions provisions. Given the law’s transnational reach, citizens from countries with financial or trade relations with Russia have the ability to safely and effectively blow the whistle and help U.S. authorities seize sanctioned Russian wealth.
We Helped Write the AML Law
Our firm was the driving force that collaborated with Congressional offices to draft critical amendments to the Anti-Money Laundering Improvement Act. Our team spearheaded efforts to pass the AML whistleblower legislation over the past two years.
2022: Collaborating with the National Whistleblower Center and Whistleblower Network News, our team spearheaded a triumphant grassroots campaign advocating for adopting the Anti-Money Laundering Improvement Act. This legislation safeguards and encourages whistleblowers who reveal the concealed assets of oligarchs, sanctions breaches, and criminals’ devious financial operations.
The bill empowers the Department of Treasury to trace the billions of dollars laundered via American banks and to confiscate the assets of Russian oligarchs and others who launder funds to conceal their unlawfully acquired wealth.
2021: Kohn, Kohn, and Colapinto led advocacy efforts to amend the whistleblower reward provisions in the Anti-Money Laundering Act of 2020 (AML Act).
2018: Stephen M. Kohn, a whistleblower attorney, delivered testimony to the European Parliament, encouraging the expansion of whistleblower protection to encompass money laundering cases.
2018: Collaborating with the National Whistleblower Center, our firm successfully convinced Congress to revise the IRS tax whistleblower law, extending its coverage to all crimes investigated by the IRS criminal division, including money laundering.
Hiring an AML Whistleblower Attorney
The AML whistleblower program has an international reach, and the whistleblower attorneys at our firm are experienced in handling these complex cases. If you have information about money laundering or sanctions violations and need assistance, contact our AML whistleblower attorneys for a free and confidential consultation.
On September 19, 2018, news broke of $234 billion money laundering scheme. The scheme moved rubbles out of Russia, converted them to dollars at the Estonian branch of Danske Bank, and then moved the dollars to New York with the assistance of three correspondent banks (Bank of America, J.P Morgan, and Deutsche Bank).
Danske Bank admitted all of its internal controls designed to prevent money laundering had failed. The bank also revealed that the scheme had been reported to the highest levels of the bank by a whistleblower over four years before. The whistleblower’s identity was required to be secret. But it took only days for his name to leak out.
Soon the entire international banking world learned that the former Danske Bank manager Howard Wilkinson had exposed the largest money laundering scheme in history, and that the bank had tried to cover it up.
This article originally appeared in JD Supra. When President Biden signed the Anti-Money Laundering (AML) Whistleblower Improvement Act on December 29th, 2022, the Treasury Department had its work cut out for them. In the shadow of the highly successful Securities and Exchange (SEC) and Commodity Futures Trading Commissions (CFTC), the new program is expected to process ...
As reported in Bloomberg, Kohn, Kohn & Colapinto “represents two whistleblowers outside the U.S. who claim a bank caters to sanctioned Russian oligarchs and entities and may have failed to flag suspicious flows of Russian money through the U.S.” In order to protect the anonymous whistleblowers from retaliation, Kohn, Kohn ...
This piece originally appeared in JD Supra. A two-year campaign to create an effective law incentivizing whistleblowers to report money laundering and sanctions busting has ended with a stunning and surprise victory for whistleblowers. It started in December 2020 when Congress released the Conference Committee report on the National Defense Authorization Act ...
Under the AML Whistleblower Program, whistleblowers who report potential money laundering violations are protected from retaliation. Protected disclosures include reporting any potential violation of federal law relating to records and reports on monetary instruments or criminal money laundering to the employer of the whistleblower, the appropriate U.S. authorities, any member of Congress, or the whistleblower’s supervisor or any person working at the employer who has the authority to investigate the misconduct.
Forms of retaliation prohibited by the AML whistleblower law include termination, demotion, reassignment to a less desirable position, harassment, blacklisting, as well as more subtle forms such as ostracization.
AML whistleblowers who have suffered retaliation have 90 days to file a complaint with the Occupational Safety and Health Administration (OSHA) Whistleblower Program. Whistleblowers who suffer retaliation are entitled to reinstatement, double back pay, and other relief.
Notably, however, the AML Whistleblower Program does not extend anti-retaliation protections to employees at banks that are covered under the Federal Deposit Insurance Act or 214 of the Federal Credit Union Act.
The whistleblower provisions of the AML Act were modeled off those found in the Dodd-Frank Act, which established the highly successful SEC and CFTC Whistleblower Programs. The AML Whistleblower Program is therefore very similar to these previously established whistleblower programs.
Just like SEC and CFTC whistleblowers, AML whistleblowers may report anonymously and are entitled to monetary awards of 10-30% of the funds collected by the government if they voluntarily provide original information that leads to a successful enforcement action.
The Financial Crimes Enforcement Network (FinCEN) and the Office of Foreign Assets Control (OFAC), both under the Department of the Treasury, oversee the administration of the BSA and respective sanctions laws.
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