Anti-Money Laundering Whistleblower Reward Program

Anti-Money Laundering Whistleblower Reward Program

Overview

The Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN)  administers the Anti-Money Laundering Whistleblower Reward Program, passed into law as part of the Anti-Money Laundering Act of 2020 (AMLA).  The program provides for mandatory awards to qualifying whistleblowers who provide information about violations of the Bank Secrecy Act (BSA), the principal law used by the Government to prosecute money laundering.

The Anti-Money Laundering Reward program provides for awards of up to 30% of monetary sanctions imposed by the government based on whistleblower tips.  The Department of Justice may use whistleblowers’ information to bring civil, criminal or forfeiture actions against those who violate the BSA.

Violations covered by the Program

Typical violations often include systemic noncompliance with the requirements of the BSA, such as the following: a bank’s failure to file the required paperwork for a suspicious transaction, known as a Suspicious Activity Report (SAR); a failure to register with FinCEN by a Money Services Business (including exchangers and administrators of convertible virtual or crypto currencies); or a failure to create and maintain an anti-money laundering program. Whether FinCEN and other enforcement agencies pursue BSA violations depends on a range of factors including the nature and seriousness of the violations; their impact on the financial system; the pervasiveness of wrongdoing within an entity; any history of similar violations; and, financial gain arising from the violations

Key Features of the Program

• The information provided may be original information based on first-hand knowledge about specific money laundering schemes or through independent analysis.
• Monetary sanctions recovered by the government based on the whistleblowers tip – including penalties, disgorgement and interest – must exceed $1 million to qualify for an award.
• If a whistleblower is criminally convicted based on conduct related to the conduct they reported, then they will not be eligible for a reward.
• Whistleblowers can qualify for awards relating to conduct that predated the creation of the new AML whistleblower program.  The statutes of limitations for violations of the BSA date back six years for civil actions under 31 U.S.C. § 5321(b) and five years for criminal penalties under 18 U.S.C § 3282(a).
• The AML whistleblower program does set a minimum on awards.  It only sets a maximum award of 30% of monetary sanctions.

Protection for Whistleblowers

• If a whistleblower is represented by counsel, they may submit their information anonymously.  But if their claim qualifies for an award, they must reveal their identity to the Government to collect payment.
• The identity of the whistleblower is kept confidential unless the Government is required to disclose the whistleblower’s identity in a court proceeding.
• Retaliation against whistleblowers is prohibited by law.  Employers cannot “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.”  If retaliation violations are proven, the whistleblower will be entitled to reinstatement, two times the amount of back pay plus compensatory damages.

Confidential Consultations

If you would like a confidential consultation to learn more about the program before contacting federal authorities, contact counsel@lopds.com