How Can People Obtain AML Whistleblower Awards for Reporting Money Laundering & Sanctions Violations

Patterned after the highly successful SEC whistleblower program which has recovered billions for the government and hundreds of millions for whistleblowers, the government has installed a new whistleblower program to incentive individuals who are aware of money laundering to come forward and potentially receive up to 30% of what the government recovers. 

Further, with the use of an AML whistleblower attorney the individual may stay anonymous from start to finish.  A key concept in AML (anti-money laundering) doctrine is KYC (know your client) and the law seeks to hold accountable financial institutions or other fiduciaries who are deliberately dense about their clients in order to facilitate their business. Fiduciaries can’t be ostriches with their heads in the sand and for compliance purposes if they’re aware of potential AML violations need to report them and need to conduct some modicum of due diligence on their clients or else they may have liability.  

Examples of Money Laundering

One such example regarding money laundering is the concealment of the origin of funds from prohibited countries or individuals, otherwise known as sanctioned individuals.  Sanctioned countries and individuals are prohibited from using United States banks and if they do so, are doing it at their own peril as the money is subject to abrupt seizure and forfeiture. Other instances of money laundering are when the banks are used for illicit activities and the true nature and origin of the funds are concealed.

Understanding the AML Compliance for Firms Regulated by FINRA

Firms regulated by FINRA must comply with the Bank Secrecy Act and its regulations (“AML rules”). The AML rules are to help detect and report suspicious activity including the predicate offenses to money laundering and terrorist financing, such as securities fraud and market manipulation. Compliance with AML rules is evaluated under FINRA Rule 3310. The basic tenets of an AML compliance program under FINRA 3310 include the following and failure to follow these steps may trigger institutional liability for KYC or due diligence AML violations:

• The program must be approved in writing by a senior manager.
• It must be reasonably designed to ensure the firm detects and reports suspicious activity.
• It must be reasonably designed to achieve compliance with the AML Rules, including, among others, having a risk-based customer identification program (CIP) that enables the firm to form a reasonable belief that it knows the true identity of its customers.
• It must be independently tested to ensure proper implementation of the program.
• Each FINRA member firm must submit contact information for its AML Compliance Officer through the FINRA Contact System (FCS).
• Ongoing training must be provided to appropriate personnel.
• The program must include appropriate risk-based procedures for conducting ongoing customer due diligence, including (i) understanding the nature and purpose of customer relationships for the purpose of developing a customer risk profile; and, (ii) conducting ongoing monitoring to identify and report suspicious transactions and, on a risk basis, to maintain and update customer information, including information regarding the beneficial owners of legal entity customers.

AML Whistleblower Awards

It is estimated that hundreds of billions of dollars each year are laundered through the banks, and with whistleblower awards up to 30% that means there’s billions of dollars available in AML whistleblower rewards. Once the cycle begins the – Anti-Money Laundering Whistleblower Reward Program promises to be as successful as the SEC whistleblower program it was patterned after.  Since it’s a nascent program the cycle of success has not started yet, and often times with an inaugural program the government entity is looking to make a big splash with the first case and would love the publicity of a case on all fours settling in the hundreds of millions if not billions with a lofty amount of whistleblower awards for the participants to induce press and thus, further quality tips in coming forward.

One of the most frequently asked questions in almost any area of law is can I do it myself or should I contact an anti-money laundering whistleblower attorney. The proverb that someone who represents themselves has a fool for a client rings true.  Just like when you look in the mirror you may gloss over your own imperfections (but if you really look hard, you’re beautiful insider and out!) if you represent yourself you lose your own objectivity. Further, its always good to have a buffer when dealing with a government agency, and even further, you only have one chance to make a first impression, so you better maximize your chance to do it right the first time.  

If you hire one of the best whistleblower law firms, they often have personnel you can work with that were formerly Department of Justice and/or FBI Special Agents that can seamlessly interface with the government and present the information in a manner most palatable to them to evaluate. Most law firms of note in the whistleblower arena take cases like AML whistleblower lawsuits purely on a contingency basis, although some may charge something up front, or may undertake it on an hourly basis, particularly if they don’t believe in the strength of your case. Storied whistleblower law firm Brown, LLC only files AML cases on a contingency basis. It’s easy math when you look at the stats and the lack of success of individuals who try to navigate the legal system by themselves, would you prefer to have 100% of nothing except aggravation, or give away a percentage to have a recovery and have a law firm steer you away from the headache and the heartache.

Anti-Retaliation Measures in AML Cases

Every whistleblower program is installed with mechanisms to protect the individual who comes forward and the AML whistleblower program similarly has whistleblower protections as well that prohibit retaliation against individuals who blow the whistle. A built in component of the whistleblower protecting allows an individual to submit the money laundering whistleblower tip anonymously through the use an AML whistleblower attorney.  This is another component where experience in the field kicks in, because the law firm could still inadvertently write up the tip in a manner that burns the sources, when If you’re seeking anonymity, although there’s no guarantee it will happen from start to finish, you want to do so in a manner that obfuscates the identity of the whistleblower, even if the name isn’t explicitly offered, singular information sometimes can be traced back to the insider.  That may be inevitable if the information is so singular in nature, but the government has its ways too to conceal the source if they’re working well with the whistleblower counsel.  

The anti-money laundering statute has components that protect whistleblowers from retaliation as long as they engage in a protected activity. Whistleblowers are protected from retaliation for: 

• Reporting potential violations of federal law relating to records and reports on monetary instruments (required pursuant to 31 U.S.C. 5311 et seq.) or relating to criminal money laundering and related financial crimes to:
  • the employer of the whistleblower(s), 
  • the Treasury Department or the Department of Justice, 
  • a federal regulatory or law enforcement agency, or 
  • any member or committee of Congress; Initiating, testifying in, or assisting in any investigation or judicial or administrative action of the Department of the Treasury or the Department of Justice related to such violations.

Deadline for Filing an AML Whistleblower Complaint

Whistleblowers must file a complaint within 90 days after learning of the alleged adverse action, so it’s important about what you do and when you do it. Inherently, the Defendant money launderer should not be aware of your AML complaint if filed properly, but there may be some instances that confrontation about the money laundering has led to adverse action and the statutory protections may trigger. All of this underscores why its important to hire a whistleblower lawyer early in the process to know your rights and maximize your upside and protection.