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Anti-money-laundering whistleblowers – attorneys explain rewards & protections

What is the anti-money laundering whistleblower program?

The anti-money laundering whistleblower program allows whistleblowers to report money-laundering violations through a government program that offers rewards, protections against job retaliation and confidentiality. Whistleblowers may report money laundering anonymously, if they do so through an attorney.

Congress created the anti-money laundering (AML) whistleblower program as part of the fiscal 2021 National Defense Authorization Act that was enacted in January 2021.

The Defense authorization contains provisions to overhaul anti-money laundering laws in addition to establishing a new AML whistleblower program.

The AML whistleblower program has the potential to provide a big boost to anti-money laundering enforcement. Congress created similar whistleblower programs at the Securities and Exchange Commission and the Commodity Futures Trading Commission as part of the Dodd-Frank Act in 2010, and now whistleblowers are a key part of their enforcement efforts.

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) administers the anti-money laundering whistleblower program and must promulgate rules for it.

Is there a whistleblower reward for reporting money laundering?

Whistleblowers who report violations of the Anti-Money Laundering Act can receive rewards that are as much as 30% of the monetary enforcement sanctions collected in a case, depending on the significance of information and the degree of assistance that the whistleblower and their attorney provided in the investigation and enforcement action.

Other key points to keep in mind about the anti-money laundering whistleblower program, as laid out in the Defense authorization legislation:

  • To qualify, a whistleblower must voluntarily provide new (original) information about specific money laundering schemes – either from first-hand evidence or through independent analysis.
  • For a whistleblower to be eligible for a reward, monetary sanctions (penalties, disgorgement and interest) from the enforcement action based on the whistleblower’s information must exceed $1 million.
  • The government may not disclose the identity of the whistleblower or any information that could reasonably be expected to reveal the whistleblower’s identity unless required to so in connection with a court proceeding.
  • Whistleblowers may submit their information anonymously to the Treasury Department if they do so through an attorney. However, they must reveal their identity to the department before they are paid an award.
  • Whistleblowers who are convicted of a criminal violation related to the illegal conduct they reported are not eligible for rewards.

How are whistleblowers who report money laundering protected by the AML whistleblower program?

The identities of whistleblowers who report money laundering through the AML program are kept confidential.

Whistleblowers may report money laundering anonymously, if they do so through counsel. However, to receive a reward after enforcement actions in a case have ended and monetary sanctions have been collected, a whistleblower must reveal their identity at that time.

In addition, the law prohibits employers from retaliating against AML whistleblowers, specifically stating that employers cannot “directly or indirectly, discharge, demote, suspend, threaten, blacklist, harass, or in any other manner discriminate against a whistleblower in the terms and conditions of employment or post-employment.”

Those who suffer retaliation are entitled to reinstatement, two times the amount of back pay plus compensatory damages.

How does the anti-money laundering whistleblower program differ from the SEC and CFTC whistleblower programs?

The anti-money laundering whistleblower program differs from the SEC and CFTC whistleblower programs in certain significant ways, particularly in the amount of rewards offered.

The AML whistleblower program does not promise a minimum award. The law that created the AML whistleblower program sets only a maximum award (30%).

In contrast, the SEC is required to issue a whistleblower reward that ranges from 10% to 30% of the amount collected as a result of the whistleblower’s information and assistance. A guaranteed minimum award has been a critical factor for successful whistleblower programs.

AML whistleblowers who suffer employment retaliation would have to file a complaint with the Department of Labor first rather than go directly to court. If the department fails to issue a final decision in 180 days, the whistleblower then could file a complaint in federal district court.

The sections of the Defense Authorization Act for Fiscal Year 2021 that created the anti-money laundering whistleblower program are posted here.

Whistleblower lawyers for AML cases

If you are aware of money laundering and are considering becoming a whistleblower, contact Phillips & Cohen for a free, confidential review of your matter by experienced and successful financial whistleblower attorneys.

 

 

 

 

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