Anti-Money Laundering (AML) Whistleblower Reward Program

Recognizing the success of whistleblower incentives in combatting fraud against the government, securities fraud, tax fraud, commodities fraud, and other types of fraud, Congress included in the Anti-Money Laundering Act a provision that incentivizes whistleblowers to report money laundering to the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

In December 2022, Congress strengthened the AML Whistleblower Reward Program by creating a fund to pay awards, establishing a minimum award of 10% of collected monetary sanctions, and expanding the AMLA whistleblower program to cover sanctions evasion (violations of the International Emergency Economic Powers Act, sections 5 and 12 of the Trading With the Enemy Act, and the Foreign Narcotics Kingpin Designation Act). See our recent article providing tips for whistleblowers disclosing violations of US sanctions: Strengthened Enforcement of Sanctions Evasion Enhances Incentives for Sanctions Whistleblowers.

In a May 6, 2024 speech, FinCEN Director Andrea Gacki discussed the success of the AML whistleblower program in generating significant disclosures of money laundering and sanctions violations:

FinCEN [is] commitmed to implementing, and realizing the full potential of, its new Anti-Money Laundering and Sanctions Whistleblower Program.

This program holds tremendous potential as an enforcement force-multiplier. Whistleblowers have submitted information relating to some of the most pressing policy objectives of the United States, from Iran- and Russia-related sanctions evasion to drug-trafficking to cyber-crimes and corruption. While efforts are underway to develop an online tip intake portal and other aspects of this important program, I want to note that even while these efforts are underway, the program is actively receiving, reviewing, and sharing tips with our enforcement partners.

We have received over 270 unique tips since the program’s inception, and many of the tips received have been highly relevant to many of Treasury’s top priorities. Whistleblowers who voluntarily submit original information to FinCEN about certain violations of the BSA or economic sanctions could be awarded between 10 to 30 percent of penalties collected if their information leads to successful enforcement actions.

Anti-Money Laundering (AML) Whistleblower Attorneys

Call our anti-money laundering whistleblower lawyers at 202-930-5901 or contact us to find out if you are eligible for an AML whistleblower award. A delay in reporting money laundering can potentially disqualify a whistleblower from recovering an award or can lower a whistleblower award, so call us today for a free consultation about whether you may have original information that would qualify for a monetary award from the AML whistleblower program.

Our firm has represented AML whistleblowers and lobbied for the passage of the AMLA whistleblower reward and protection provisions.  Recently, the Wall Street Journal quoted our firm in an article titled Defense Bill Proposes Anti-Money-Laundering Whistleblower Program:

The proposed cash-for-tips program would be a critical tool to identify and combat money laundering, said Jason Zuckerman, a lawyer at Zuckerman Law who represents whistleblowers. He said the proposed program rules are similar to those governing the Securities and Exchange Commission’s whistleblower program, which was created by the Dodd-Frank Act.

“Often, people aware of money laundering might have learned about it in the course of interaction with organizations that are involved in financial crimes, and stepping forward to report it is a big deal,” Mr. Zuckerman said.

Qualifying for an Award from the Anti-Money Laundering (AML) Whistleblower Program

Section 6314 of the AMLA incentivizes whistleblowers to report money laundering by requiring Treasury to pay an award of up to 30 percent of collected monetary sanctions that it recovers in a judicial or administrative action brought under the Bank Secrecy Act that results in sanctions exceeding $1,000,000.

Whistleblowers abroad who are not U.S. citizens are eligible for AML whistleblower awards where the BSA violations they report are within the jurisdiction of U.S. law enforcement.

Fines for money laundering can be substantial.  In February 2018, U.S. Bancorp/U.S. Bank paid $613 million in fines and forfeitures to settle charges that it failed to maintain adequate safeguards against money laundering. In particular, U.S. Bancorp/U.S. Bank limited the number of transactions its systems would flag as suspicious and processed Western Union transactions for non-customers.

Submitting a Money Laundering Whistleblower Tip to the FinCEN AML Whistleblower Reward Program Anonymously

If represented by an attorney, an AMLA whistleblower may submit a tip anonymously to the FinCEN AML whistleblower program. Even at the time of payment of a reward, a whistleblower’s identity is not made available to the public.

In addition, the AMLA requires Treasury and Justice to take steps to protect the confidentiality of AML whistleblower submissions.  Any officer or employee of either agency must not disclose information provided by a whistleblower “which could reasonably be expected to reveal the identity of a whistleblower,” except where the agency is required to disclose the information to a defendant in a public proceeding instituted by the agency and in accordance with the Privacy Act.

An experienced AML whistleblower lawyer will be able to skillfully guide a whistleblower through the process, maximizing the likelihood that the whistleblower’s identity is not revealed to unauthorized parties. In addition, our experienced AML whistleblowers attorney can help protect whistleblowers who experience retaliation.

How AML Whistleblowers Can Help Combat Terrorist Financing

Among the violations that whistleblowers can help the government detect and combat are sanctions evasion and money laundering related to Islamic Republic of Iran-backed terrorist organizations.  On May 8, 2024, FinCEN issued an Advisory to assist financial institutions in detecting potentially illicit transactions related to Islamic Republic of Iran-backed terrorist organizations.  FinCEN Advisory to Financial Institutions to Counter the Financing of Iran-Backed Terrorist Organizations, FIN-2024-A001 (May 8, 2024).

The Advisory identifies the means by which certain terrorist organizations receive support from Iran and the techniques they use to illicitly access or circumvent the international financial system to raise, move, and spend funds.  According to the Advisory, the sale of commodities, particularly oil, is the primary source of revenue for Iran to fund its terrorist proxies.  Iran has “established large-scale global oil smuggling and money laundering networks to enable access to foreign currency and the international financial system through the illicit sale of crude oil and petroleum products in global markets.”  FIN-2024-A001, at 3.  In 2021, the National Iranian Oil Company sold approximately $40 billion worth of petroleum products and in 2023, Iran’s exports to the People’s Republic of China reached approximately 1.3 million barrels per day.  Some of the proceeds of the sale of Iranian oil finances the activities of the IRGC-Qods Force and other terrorist groups.

Financial institutions located outside Iran become intermediaries for the IRGC-QF’s terrorist financing transactions.  In particular, “third-country front companies—often incorporated as ‘trading companies’ or ‘general trading companies’—and exchange houses act as a global ‘shadow banking’ network that processes illicit commercial transactions and channels money to terrorist organizations on Iran’s behalf.”  Those exchange houses and front companies rely on banks with correspondent accounts with U.S. financial institutions, especially to process dollar-denominated transactions.  FIN-2024-A001, at 5.

FinCEN-Advisory-Iran-Backed-TF-508C

Monetary Sanctions Qualifying for Anti-Money Laundering Act Whistleblower Rewards

The monetary sanctions collected in any judicial or administrative action that can qualify for an AMLA whistleblower award include any monies, including penalties, disgorgement, and interest ordered to be paid, but excludes (i) forfeiture; (ii) restitution; and (iii) any victim compensation payment.

An AMLA whistleblower may also qualify for a “related action” award, which is any judicial or administrative action brought by (i) any appropriate federal authority; (ii) a state attorney general in connection with any criminal investigation; or (iii) any appropriate state regulatory authority, when the action is based on the original information provided by the whistleblower and led to the successful enforcement of the action by Treasury or Justice.

Determining the Amount of an AML Whistleblower Award

To determine the amount of an AMLA whistleblower award, Treasury will consider:

• the significance of the information provided by the whistleblower to the success of the covered money laundering judicial or administrative action;
• the degree of assistance provided by the whistleblower and any legal representative;
• the programmatic interest of Treasury in deterring the particular violations that the whistleblower disclosed; and
• additional relevant factors that Treasury will promulgate, which will likely echo the factors that the SEC employs to determine the amount of an SEC whistleblower award.

AML Whistleblower Rewards Attorneys

The anti-money laundering whistleblower lawyers at Zuckerman Law have experience representing AML whistleblowers and one of our attorneys is also a Certified Public Accountant and Certified Fraud Examiner.

Experienced and effective AML whistleblower attorneys can provide critical guidance and effective advocacy to whistleblowers to increase the likelihood that they get the maximum award from the FinCEN Whistleblower Program.

U.S. News and Best Lawyers® have named Zuckerman Law a Tier 1 firm in Litigation – Labor and Employment in the Washington DC metropolitan area.

To discuss potential representation in an anti-money laundering whistleblower case, click here or call us at (202) 262-8959.

Guide to Anti-Money Laundering Act Whistleblower Rewards and Protections

AML Whistleblower Lawyers’ Expert Analysis About the FinCEN AML Whistleblower Reward Program

Whistleblower Protections for AML Whistleblowers

Section 6314(g) of the AMLA creates a private right of action for whistleblowers who have suffered retaliation for disclosing potential Bank Secrecy Act violations to Treasury or Justice, a federal regulatory or law enforcement agency, Congress, or a person with supervisory authority over the whistleblower.  It also protects a whistleblower assisting in any investigation or judicial or administrative action of Treasury or Justice based on or related to the information that the whistleblower disclosed to the government.

In contrast to Dodd-Frank’s whistleblower protection provision, AMLA-protected whistleblowing does not require a threshold showing that the whistleblower reported a potential BSA violation to the appropriate regulatory agency.  Instead, internal whistleblowing alone is protected.  Moreover, the whistleblower need not meet the AMLA requirements for award eligibility to be protected under the anti-retaliation provision.

Similar to the SOX whistleblower protection law, the AMLA prohibits a wide range of retaliatory acts, including directly or indirectly discharging, demoting, suspending, threatening, blacklisting, harassing, or in any other manner discriminating against a whistleblower in the terms and conditions of employment due to the employee’s protected whistleblowing.

The causation standard in an AMLA retaliation claim is favorable to the whistleblower.  To prevail, the whistleblower need only demonstrate that their protected whistleblowing was a contributing factor in the unfavorable personnel action taken by their employer.  Once the whistleblower demonstrates contributing factor causation, the employer can avoid liability only if it proves by clear and convincing evidence that it would have taken the same adverse action in the absence of the whistleblower engaging in protected conduct.

A prevailing AMLA whistleblower is entitled to reinstatement, double back pay with interest,  uncapped compensatory damages, reasonable attorney fees, any other appropriate remedy with respect to the conduct that is the subject of the action.

AMLA retaliation claims must be filed initially with the Occupational Safety and Health Administration within 90 days from the date on which the whistleblower is first notified of the adverse action, and 180 days after filing, the whistleblower can remove the claim to federal court and try the case before a jury.

This new law will afford robust protection to whistleblowers disclosing money laundering, but it will not apply to employees at credit unions and FDIC-insured depository institutions.  Those employees can bring retaliation claims under weaker anti-retaliation laws that protect only whistleblowing to the government (not internal whistleblowing), impose a higher burden of causation, and provide anemic remedies. See 12 U.S.C. § 1831j; 12 U.S.C. §§ 1790b, 1790c.  For the AMLA whistleblower program to succeed, Congress should eliminate this exception to the scope of AMLA whistleblower protection.

Click here to learn more about AMLA whistleblower protection.

Resources About the AML Whistleblower Program

Bank Secrecy Act

Bank Secrecy Act Regulations

Frequently Asked Questions Regarding the FinCEN Suspicious Activity Report (SAR)

Answers to Frequently Asked Bank Secrecy Act (BSA) Questions

FinCEN Files investigation

FACT Coalition: Landmark Bill Ending Anonymous U.S. Companies Is Enacted

Resources About Bank Secrecy Act Violations

12 U.S.C. 1829b – Retention of records by insured depository institutions

12 U.S.C. 1951 – Congressional findings and declaration of purpose
12 U.S.C. 1952 – Reports on ownership and control
12 U.S.C. 1953 – Recordkeeping and procedures
12 U.S.C. 1954 – Injunctions
12 U.S.C. 1955 – Civil penalties
12 U.S.C. 1956 – Criminal penalty
12 U.S.C. 1957 – Additional criminal penalty in certain cases
12 U.S.C. 1958 – Compliance
12 U.S.C. 1959 – Administrative procedure
12 U.S.C. 1960 – Safe harbor with respect to keep open directives

31 U.S.C. 5311 – Declaration of purpose
31 U.S.C. 5312 – Definitions and application
31 U.S.C. 5313 – Reports on domestic coins and currency transactions
31 U.S.C. 5314 – Records and reports on foreign financial agency transactions

31 U.S.C. 5316 – Reports on exporting and importing monetary instruments
31 U.S.C. 5317 – Search and forfeiture of monetary instruments
31 U.S.C. 5318 – Compliance, exemptions, and summons authority
31 U.S.C. 5318A – Special measures for jurisdictions, financial institutions, international transactions, or types of accounts of primary money laundering concern
31 U.S.C. 5319 – Availability of reports
31 U.S.C. 5320 – Injunctions
31 U.S.C. 5321 – Civil penalties
31 U.S.C. 5322 – Criminal penalties
31 U.S.C. 5323 – Whistleblower incentives and protections
31 U.S.C. 5324 – Structuring transactions to evade reporting requirement prohibited
31 U.S.C. 5325 – Identification required to purchase certain monetary instruments
31 U.S.C. 5326 – Records of certain domestic transactions

[31 U.S.C. 5327 and 5328 have been repealed.  Section 5327, relating to financial institutions reporting on customers, was repealed in 1996. Section 5328, relating to protections for whistleblowers, was repealed by the National Defense Authorization Act for Fiscal Year 2021.]

31 U.S.C. 5329 – Staff commentaries
31 U.S.C. 5330 – Registration of money transmitting businesses
31 U.S.C. 5331 – Reports relating to coins and currency received in nonfinancial trade or business
31 U.S.C. 5332 – Bulk cash smuggling into or out of the United States
31 U.S.C. 5333 – Safe harbor with respect to keep open directives
31 U.S.C. 5334 – Training regarding anti-money laundering and countering the financing of terrorism
31 U.S.C. 5335 – Prohibition on concealment of the source of assets in monetary transactions
31 U.S.C. 5336 – Beneficial ownership information reporting requirements

Implementing Regulations: 31 CFR Chapter X