5 January 2023. On December 29, 2022, President Joseph Biden signed the Consolidated Appropriations Act of 2023 into law, which included the Anti-Money Laundering Whistleblower Improvement Act (2022 AML Whistleblower Improvement Act). As the name suggests, this act improves upon the original 2020 Anti-Money Laundering Act (2020 AML Act), namely setting a minimum reward for whistleblowing, expanding who is eligible for whistleblower rewards, and establishing a fund from which to pay whistleblowers. The law is good for Republicans and Democrats because it helps to protect America. As Senator Charles Grassley (R-IA) said about the legislation, which he introduced in December 2021, “I’m optimistic that our new program encouraging individuals to come forward for suspected sanctions violations will be successful as well. Given the expansive sanctions we’ve implemented on Russia as they wage an unjust war in Ukraine, our legislation is urgently needed to hold bad actors accountable.” Senators Raphael Warnock (D-GA), Elizabeth Warren (D-MA), and Catherine Cortez-Masto (D-NV) co-sponsored the bill in the Senate.
The provisions of the Anti-Money Laundering Act of 2020 (enacted on January 1, 2021) directed U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) to work more closely with industry and develop a whistleblower program to encourage reporting of Bank Secrecy Act (BSA) violations. Violations of the Bank Secrecy Act constitute criminal financial schemes, including tax evasion, money laundering, and terrorist financing. Critics pointed out the 2020 AML Act was toothless and its lack of funds to pay whistleblowers crippled it as either a financial crime prosecution or deterrent tool.
The 2022 AML Whistleblower Improvement Act is modeled on the whistleblower provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the SEC whistleblower program. The 2022 AML Whistleblower Improvement Act provides for the funding of whistleblower rewards for reporting money laundering schemes without requiring a legislative appropriation. Under the Act, whistleblowers can be rewarded for reporting violations of the International Emergency Economic Powers Act, the Foreign Narcotics Kingpin Designation Act, and the Trading with the Enemy Act.
What changed with the 2022 AML Whistleblower Improvement Act?
- The 2022 AML Whistleblower Improvement Act now sets a minimum award for whistleblowers reporting financial violations resulting in monetary sanctions exceeding $1,000,000 at 10% of the penalty collected.
- Whistleblowers will be paid out of a fund established by the U.S. Treasury to be called the Financial Integrity Fund, which is comprised of penalties collected from financial sanctions violators.
Who can blow the whistle on money laundering?
Under the 2020 AML Act, a whistleblower can be any individual or group of individuals with original knowledge of a financial sanctions violation. You do not have to be a US citizen to report fraud against the American government. Members, officers, or employees of government regulatory, banking, or law enforcement agencies are excluded.
Are there protections for whistleblowers under the 2022 AML Whistleblower Improvement Act?
Yes, the 2022 AML Whistleblower Improvement Act includes a prohibition against retaliation, including protections from employment-related discrimination and harassment.
If you would like to report money laundering fraud, tax evasion, terrorist financing, violations of the Bank Secrecy Act, and other financial fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts and served on President Obama’s Financial Fraud Enforcement Task Force. Eva was also in a Senior role in the same DOJ Office. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at https://www.fraudfighters.net/.