March 8, 2023

In 2020, Congress passed the Anti-Money Laundering Act (“AMLA”) to assist the United States in identifying money laundering violations by financial institutions. The AMLA included stronger “whistleblower” incentives for employees or other persons to report violations, as well as enhanced protections for reporting employees against retaliation by employers. In part, the AMLA increased the potential amount of monetary awards available to whistleblowers while simultaneously reducing the government’s discretion in paying such awards.

In December 2022, to even further incentivize whistleblowers to report financial institutions engaged in money laundering, President Joe Biden signed into law the Anti-Money Laundering Whistleblower Improvement Act (“AML Whistleblower Act”).  This blog discusses the definitions of “whistleblower’ and “financial institution” as applicable to the act, and identifies the basic protections and enhancements afforded by the AML Whistleblower Act. 

Changes Brought by the AML Whistleblower Act

Under the AML Whistleblower Act, the term whistleblower covers any individual who provides information relating to a violation of the subchapter to either (a) the United States, via either the Secretary of Labor or the Attorney General or (b) their employer. (31 U.S.C. Section 5323.)  Pursuant to the AML Whistleblower Act, a “whistleblower” also includes two or more individuals acting jointly to provide information, meaning that a group of people who collectively report the violations are also afforded the same protections and incentives.

The scope of “financial institutions” as defined by the act is broad and includes 26 statutorily enumerated categories. The categories include institutions traditionally thought of as being in the financial services sector such as commercial banks or trust companies, private bankers, credit unions, securities or commodities brokers or dealers, investment bankers or investment companies, currency exchange businesses, credit card system operators, and loan and finance companies.  Further, it includes other businesses that are less traditionally thought of as being in the sector, including pawnbrokers, travel agents, and casinos.

AML Whistleblower Act & AMLA

The AML Whistleblower Act expands upon the AMLA in three primary ways. First, the AML Whistleblower Act established statutory minimum awards for whistleblowers who voluntarily provide information that leads to a successful enforcement action.  Specifically, the AML Whistleblower Act guarantees that such a whistleblower will receive an award of anywhere from 10% to 30% of the collected monetary sanctions imposed and collected, with a guaranteed amount of not less than 10% of collected sanctions.  This is a notable change from the AMLA, which did not include a mandatory statutory minimum.

Second, the AML Whistleblower Act established $300 Million fund called the “Financial Integrity Fund”, which allows the Department of Treasury to pay out whistleblower awards directly from collected sanctions.  Accordingly, moving forward, awards to whistleblowers will not be dependent upon congressional appropriations, as has been the case in the past.

Third, the AML Whistleblower Act broadens the scope of covered actions to include violations of the Foreign Narcotics Kingpin Designation Act, International Emergency Economic Powers Act, and Trading with the Enemy Act, including conspiracies to violate any of those acts.  This allows people from all over the world, including those who are not United States citizens, to bring whistleblower claims and receive compensation upon the successful prosecution and collection of their claims.

Seeking Legal Assitance as a Whistleblower

Ultimately, if you are an employee of a financial institution (or any other person with firsthand knowledge) who suspects a financial institution is violating anti-money laundering laws, you may be entitled to protections and incentives for reporting the violations.  If so, you should immediately contact an attorney who will be able to help analyze your claim and assist you through the nuances of the law and delicacies process. The attorneys at Zweiback, Fiset & Zalduendo have decades of experience bringing whistleblower claims on behalf of clients and obtaining awards for them. Contact Zweiback, Fiset & Zalduendo for your free consultation today.   

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