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FinCEN: AML & Sanctions Whistleblower Program

What is FinCEN?

FinCEN, or the Financial Crimes Enforcement Network, is a bureau of the U.S. Department of the Treasury responsible for implementing and enforcing regulations to prevent financial crimes, including money laundering and the financing of terrorism.  The agency oversees compliance with anti-money laundering (AML) regulations and countering the financing of terrorism (CFT), including the AML whistleblower program. 

FinCEN works with other federal regulators, including the Department of Justice, the U.S. Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC) to bring criminal, civil, and forfeiture actions.  

FinCEN’s primary goal is to safeguard the financial system by combating money laundering, sanctions evasion, fraud, corruption, and other financial crimes.  

What is OFAC?

Like FinCEN, the Office of Foreign Assets Control (OFAC) is also under the umbrella of the Treasury Department. OFAC is responsible for enforcing economic and trade sanctions based on the U.S.’s national security goals and foreign policy decisions. OFAC operates under the International Emergency Economic Powers Act, and Trading With the Enemy Act, among other laws.   

The AML Whistleblower Program

Administered by FinCEN, the anti-money laundering (AML) whistleblower program was created as part of the fiscal 2021 National Defense Authorization Act, enacted in January 2021. The Defense authorization contained provisions to overhaul anti-money laundering laws and established a new AML whistleblower program.

The program encourages whistleblowers to report money laundering and sanctions evasion by offering financial rewards, protections against job retaliation, and confidentiality.  Whistleblowers need not be U.S. citizens and may report money laundering and sanction evasion anonymously if they do so through an attorney.

The Anti-Money Laundering Whistleblower Improvement Act of 2022

The Anti-Money Laundering Whistleblower Improvement Act of 2022 amended the Anti-Money Laundering Act of 2020 to broaden the law to cover the reporting of violations of financial management rules for executive agencies; sanctions on foreign nations, entities, or individuals identified as enemies of the United States; and sanctions on foreign narcotics traffickers. The amended Act also provides for a funding structure and statutory minimum awards to successful whistleblowers. A key motivation for the bipartisan amendments was the ability of the program to encourage whistleblowers to disclose Russian oligarchs’ hidden assets and sanctions-busting schemes.

Protections for FinCEN and OFAC Whistleblowers

FinCEN and OFAC whistleblowers are entitled to protection against job retaliation and confidentiality.   

FinCEN Whistleblower Rewards

Whistleblowers who provide original, timely, and credible information about violations of the Bank Secrecy Act (BSA), other FinCEN regulations or OFAC sanctions may be eligible for a reward of between 10% and 30% of the total monetary sanctions collected as a result of the enforcement action.

FinCEN Whistleblower FAQs

What gets reported to FinCEN?

FinCEN requires the reporting of financial transactions that may indicate money laundering, including:

  • Cash transactions over $10,000
  • Multiple currency transactions that total over $10,000 in one day
  • Suspicious activity involving any transaction or pattern of transactions at or above $2,000

Do FinCEN and OFAC have enforcement powers?

Yes, both agencies do.  FinCEN and OFAC have investigative powers and can bring enforcement actions seeking penalties and other civil remedies in federal court and administrative proceedings.  

In addition, the Department of Justice may also pursue parallel criminal charges against wrongdoers based on the whistleblower’s information.

What is the reward for a FinCEN or OFAC whistleblower?

Whistleblowers who provide original, timely, and credible information about violations of the Bank Secrecy Act (BSA), other FinCEN regulations, or OFAC sanctions may be eligible for a reward of up to 30% of the total monetary sanctions collected as a result of the enforcement action. While rewards vary on a case-by-case basis, the (FinCEN) Whistleblower Program rewards whistleblowers with 10–30% of any fines or penalties FinCEN or OFAC recover over $1 million. 

Whistleblowers who provide information leading to successful enforcement might also be eligible to earn an award for related criminal or civil actions that are based on the whistleblower’s original information. These related actions may be brought by a federal agency, state attorney general, or state regulatory agency and may involve violations of laws other than the BSA or OFAC sanctions. 

Examples of FinCEN violations and settlements

  • In 2014, BNP Paribas S.A. (BNPP), a financial institution headquartered in Paris, pleaded guilty to conspiring to violate the International Emergency Economic Powers Act (IEEPA) and the Trading with the Enemy Act (TWEA) for processing billions of dollars of transactions through the U.S. financial system on behalf of Sudanese, Iranian, and Cuban entities subject to U.S. economic sanctions.  The company agreed to pay $963 million settlement according to the U.S. Department of the Treasury’s OFAC for apparent violations of U.S. sanctions regulations.  The settlement, part of a combined $8.9 billion settlement with state and federal government agencies, was the largest ever sanctions-related settlement at the time.  
  • In 2021, FinCEN announced that Capital One had been assessed a $390 million civil money penalty for violations of the Bank Secrecy Act for failing to implement and maintain an effective Anti-Money Laundering (AML) program to guard against money laundering.  Capital One also admitted that it failed to file thousands of suspicious activity reports (SARs), and negligently failed to file thousands of Currency Transaction Reports (CTRs), with respect to a particular business unit known as the Check Cashing Group.
  • In 2023, FinCEN, OFAC, CFTC, and the U.S. Department of Justice announced that Binance Holdings Ltd. agreed to pay $4.3 billion for violations of the U.S. anti-money laundering and sanctions laws. As part of the settlement. Binance’s founder, Changpeng “CZ” Zhao, agreed to step down as CEO of the cryptocurrency exchange he founded. 

Phillips & Cohen Represents FinCEN and OFAC Whistleblowers

FinCEN and the AML whistleblower program are key tools for upholding the integrity of the financial industry, curbing money laundering, and assuring compliance with US economic and trade sanctions.

The whistleblower attorneys at Phillips & Cohen understand the complex nature of FinCEN, OFAC, and the AML and sanctions whistleblower program and will fight to protect your rights. Feel free to contact Phillips & Cohen for a confidential review of your potential case.

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