While the U.S. government devotes substantial resources to uncovering and prosecuting money laundering and related illicit financial transactions, it also relies heavily on whistleblowers to come forward. Multiple federal agencies have implemented anti-money laundering (AML) whistleblower programs as part of their broader efforts to work with whistleblowers, and AML whistleblowers who report violations to these agencies may be eligible to receive both protections against retaliation and whistleblower rewards.

Eligible individuals can report numerous statutory and regulatory violations under these federal whistleblower programs. This includes not only violations of federal anti-money laundering laws, but violations of other federal statutes and regulations as well. Sanctions violations under federal trade sanctions laws, failure to file suspicious activity reports or currency transaction reports under the Bank Secrecy Act, and failure to prevent the execution of transactions involving terrorist financing and other financial crimes are just a few examples of violations that AML whistleblowers can disclose to the relevant federal authorities.

“Federal AML whistleblower laws protect individuals who come forward with information about numerous types of federal statutory and regulatory violations. From reporting money laundering to reporting institutional AML program failures, whistleblowers can receive protections (and potentially receive monetary awards) for coming forward in a wide range of scenarios.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.

While many AML whistleblowers are employees and former employees of financial institutions, other individuals can report civil and criminal violations under federal AML whistleblower programs as well. For all potential whistleblowers, it is important to make an informed and timely decision about whether to come forward, and an experienced federal whistleblower attorney will be able to help with making a final decision based on a clear and comprehensive understanding of all pertinent considerations.

Federal Anti-Money Laundering (AML) Laws: An Overview

The federal anti-money laundering (AML) regime is extremely complex. It encompasses multiple federal statutes that apply to financial institutions, credit unions, and other entities, and it imposes requirements ranging from implementing internal AML compliance programs to complying with trade sanctions enforced by the U.S. Office of Foreign Assets Control (OFAC). All of these requirements are designed to protect the integrity of the U.S. financial system and U.S. national security; and, as a result, federal law enforcement agencies take compliance very seriously. Enforcement actions can expose financial institutions and other entities to significant monetary penalties; and, in some cases, they can have other consequences as well.

Some of the key statutes that establish federal AML-related requirements—and that underpin the current federal AML whistleblower award programs and protections—include:

Bank Secrecy Act (BSA)

The Bank Secrecy Act (BSA) establishes several AML-related prohibitions and requirements—including both external and internal reporting requirements for financial institutions. It is one of the federal government’s primary and most-potent weapons for combating money laundering and related financial crimes. Along with imposing monetary sanctions for statutory violations, the BSA also includes whistleblower provisions that protect eligible whistleblowers’ identities when they help the government gather evidence in support of civil and criminal enforcement efforts.

Anti-Money Laundering Act (AMLA)

The Anti-Money Laundering Act (AMLA) was enacted in 2020, and it provides additional rights and protections to domestic and international whistleblowers. Currently, the AMLA is the primary source of statutory authority for the issuance of AML whistleblower rewards. Congress enacted the AMLA to further incentivize whistleblowers to come forward; and, under the statute, whistleblowers can receive a percentage of the compensatory damages and monetary penalties collected if their information leads to a successful enforcement action.

AML Whistleblower Improvement Act (AMLWIA)

The AML Whistleblower Improvement Act (AMLWIA) further enhances the incentives available to AML whistleblowers. Among other things, it establishes the federal Financial Integrity Fund (which is a revolving fund used to compensate AML whistleblowers) entitles eligible whistleblowers to at least 10% of any monetary penalties exceeding $1 million that the government recovers based on the information whistleblowers provide, with only limited exceptions. The enactment of the AMLWIA was intended specifically to resolve an existing ambiguity about the federal government’s obligation to pay compensation when a whistleblower’s information leads to a successful enforcement action.

Other Federal Laws that Can Apply in AML Cases

Along with these money laundering-specific statutes, several other federal laws can apply in AML cases as well. While the primary focus of these statutes may not be money laundering specifically, the U.S. Treasury Department, U.S. Attorney General, and other federal authorities rely on these statutes to expose money laundering and other threats to foreign policy interests and national security:

Commodity Exchange Act (CEA)

While the Commodity Exchange Act (CEA) primarily regulates futures commission merchants and the commodity futures trading industry in general, it also includes provisions that supplement AML enforcement under the BSA.

Federal Deposit Insurance Act (FDIA)

The Federal Deposit Insurance Act (FDIA) contains prohibitions on individuals convicted of money laundering and related offenses working for federally insured financial institutions. It gives the Federal Deposit Insurance Corporation (FDIC) oversight of federally insured financial institutions’ AML compliance practices as well.

International Emergency Economic Powers Act (IEEPA)

The International Emergency Economic Powers Act (IEEPA) is another powerful weapon in the federal government’s arsenal to fight international money laundering. Financial institution personnel and other individuals who have information about IEEPA violations may be eligible to serve as AML whistleblowers.

Trading With the Enemy Act (TWEA)

The Trading With the Enemy Act (TWEA) also works alongside the BSA and the other federal laws discussed above to facilitate AML enforcement in a wide range of scenarios. While the TWEA was originally enacted as a tool for regulating international trade relations, it has played an increasingly important role in AML enforcement in recent years.

Federal Anti-Money Laundering Whistleblower Programs

As mentioned above, several federal agencies accept AML-related complaints under their whistleblower programs. This includes complaints based on both non-public information and independent analysis. With this in mind, for individuals who are considering coming forward as an AML whistleblower, it is critical to make an informed decision about whether to file a complaint with one of these agencies—or potentially to come forward through some other manner (i.e., by filing a qui tam lawsuit in federal court).

Commodity Futures Trading Commission (CFTC) Whistleblower Program

The CFTC is one of the primary federal agencies responsible for enforcing AML compliance. As such, it both relies heavily on AML whistleblowers to come forward and encourages them to do so. The CFTC accepts whistleblower complaints from current employees and in post-employment cases; and, in all such cases, it strictly protects whistleblowers’ identities.

The CFTC also pays AML whistleblower awards when warranted. Generally, to be eligible for an award, a whistleblower must provide either original information or an independent analysis that warrants a new investigation—if an existing investigation is underway, whistleblower compensation generally isn’t available (though exceptions apply). For many individuals who have information about AML violations and other violations of the statutes discussed above, securing protected whistleblower status will start with contacting the CFTC.

Other Federal AML Whistleblower Programs

In some cases, however, it will make more sense to contact a different federal agency. Other federal agencies that accept and investigate AML whistleblower complaints include:

• Financial Crimes Enforcement Network (FinCEN) – The Financial Crimes Enforcement Network (FinCEN) is an agency within the U.S. Treasury Department. It shares primary responsibility with the CFTC for enforcing BSA compliance.
• U.S. Department of Justice (DOJ) and Qui Tam Lawsuits – The U.S. Department of Justice (DOJ) also accepts whistleblower complaints in certain cases. The DOJ is responsible for investigating AML cases involving qui tam lawsuits under the False Claims Act as well.
• U.S. Securities and Exchange Commission (SEC) – The U.S. Securities and Exchange Commission (SEC) accepts AML-related whistleblower complaints involving publicly traded companies, brokerage firms, and certain other entities. It has paid some of the largest whistleblower awards in recent years.

If you are interested in serving as an AML whistleblower, an experienced federal whistleblower attorney should be able to assist you with making an informed decision about where to file your whistleblower complaint. Your attorney should also be able to assist with protecting your identity—as strong confidentiality protections are afforded to AML whistleblowers under federal law.

These protections make it unlawful for employers to in any manner discriminate or retaliate against employees who blow the whistle, and employees who experience unlawful discrimination or retaliation are entitled to back pay and other remedies. With that said, AML whistleblowers’ identities will remain confidential in most cases. If you are concerned about facing discrimination or retaliation should you decide to come forward, your attorney will be able to walk you through all pertinent considerations.

Filing an AML Whistleblower Complaint and Award Eligibility

As a general rule, to file an AML whistleblower complaint, you must be the first to come forward (though exceptions apply). You must also generally contact the government as your first course of action—which means that filing a report internally could be inadvisable (though exceptions apply here as well).

Whichever AML whistleblower program you choose, you must ensure that you meet all pertinent substantive and procedural filing requirements. If you do not, you will not be eligible for whistleblower protection or a whistleblower award. Your attorney can help here as well; and, to ensure that you are making informed decisions with your best interests in mind, you should schedule a confidential initial consultation promptly if you have questions about coming forward.