Individuals who have information about violations of the Bank Secrecy Act (BSA) and other federal anti-money laundering (AML) statutes have a variety of options for working with the government to expose compliance failures, fraud, and other violations of the law. The BSA and other statutes establish strong whistleblower incentives and protections, and individuals who are interested in coming forward can hire an experienced whistleblower attorney to represent them at no out-of-pocket cost.

While filing an AML/BSA whistleblower lawsuit is an option in some cases, whistleblowers can also report AML violations through other means. If you are interested in coming forward, an experienced whistleblower attorney will be able to help you make an informed decision about how to proceed under the circumstances at hand.

“The Bank Secrecy Act and other federal statutes include provisions that are designed to encourage individuals to voluntarily provide information about bank fraud, sanctions violations, national security risks, and other AML-related failures and concerns. Along with strong confidentiality protections, individuals who come forward will also be entitled to whistleblower awards in some cases.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.

Whether it makes sense to file a whistleblower lawsuit or come forward through other means, it is important to make an informed and timely decision. Not only can this help improve the government’s chances of pursuing a successful enforcement action, but it can be necessary for securing protected whistleblower status as well.

5 Key Facts About Filing an AML/BSA Whistleblower Lawsuit

With this in mind, here are five key facts about filing an AML/BSA whistleblower lawsuit (and potentially seeking an AML whistleblower award):

1. Financial Institutions and Other Entities Are Subject to Numerous Anti-Money Laundering (AML) Requirements

Financial institutions and other entities are subject to numerous AML-related requirements. Along with the BSA, this includes requirements under the Anti-Money Laundering Act (AMLA), Foreign Narcotics Kingpin Designation Act (Kingpin Act), International Emergency Economic Powers Act (IEEPA), and Trading with the Enemy Act (TWEA), among many other federal statutes.

These requirements range from conducting adequate due diligence prior to facilitating transactions to filing suspicious activity reports (SARs), currency transaction reports (CTRs), and other mandatory reports with the appropriate government agencies. Whistleblowers play an important role in helping the U.S. Department of Justice (DOJ) and other federal law enforcement agencies uncover violations of these requirements and seek civil penalties (and, in some cases, criminal penalties) as warranted.

2. AML/BSA Violations Can Range from Failure to Maintain an Effective AML Program to Intentional Wrongdoing

In light of the broad scope of the federal AML/BSA requirements, AML/BSA violations can take many different forms. Some examples of violations that whistleblowers can (and often do) report to the federal government include:

• Failure to adopt an adequate AML compliance program
• Failure to adopt adequate know-your-customer (KYC) protocols
• Failure to maintain an effective overall compliance program focused on identifying illicit actors and preventing illicit transactions
• Failure to generate and file SARs, CTRs, and other mandatory reports
• Failure to take other necessary steps to detect terrorist financing and other threats to national security

Again, these are just examples. If you believe that you may be eligible to serve as an AML whistleblower, you should be careful to protect the information you have in your possession, but you should also be careful about collecting any additional information from your employer’s premises or systems. The steps involved in serving as an AML whistleblower are discussed in greater detail below.  

3. All Types of AML/BSA Violations Can Trigger Monetary Sanctions and Other Penalties

Financial institutions and other entities that fail to maintain effective AML/BSA compliance programs can face monetary sanctions and other penalties in federal court. This is true for all types of failures, including (but not limited to) those listed above. If you are able to submit information based on your independent knowledge that the U.S. Department of Justice (DOJ) or another federal law enforcement agency can use to pursue a successful enforcement action, you could play an important role in the federal government’s never-ending fight to protect the integrity of the U.S. financial system.

4. FinCEN’s AML Whistleblower Program Covers Reports Under the BSA Whistleblower Provisions

While filing a whistleblower lawsuit is one potential option, in many cases individuals can also come forward under the AML Whistleblower Program administered by the Financial Crimes Enforcement Network (FinCEN). FinCEN protects whistleblowers’ identities, and it pays monetary awards to eligible whistleblowers out of its Financial Integrity Fund.

The Financial Crimes Enforcement Network’s AML Whistleblower Program provides an alternative to filing a qui tam lawsuit (more on this below), and it can be an option when filing a qui tam lawsuit is not. When you consult with an AML/BSA whistleblower attorney about coming forward, this is one of the options your attorney will help you consider.

Some other federal agencies accept AML/BSA whistleblower complaints and have whistleblower award programs as well. For example, the U.S. Securities and Exchange Commission (SEC) accepts whistleblower complaints in cases involving implications for the U.S. securities markets, and the U.S. Department of Justice (DOJ) accepts a wide range of complaints under its whistleblower programs.

5. AML/BSA Whistleblowers Can Also File Qui Tam Lawsuits in Some Cases

When government contractors and other recipients of federal funds violate the Bank Secrecy Act (BSA) or other federal AML laws, this can also amount to a violation of the False Claims Act in some cases. Under the False Claims Act’s qui tam provisions, whistleblowers can come forward in federal court while securing protection and establishing their eligibility for a whistleblower award (if their qui tam lawsuit leads to a successful enforcement action).

Filing a qui tam lawsuit under the False Claims Act is a unique process that involves going to federal court and then working with the DOJ as it investigates and decides whether to intervene. If filing a whistleblower lawsuit makes sense in your case, it will be important for you to work closely with an experienced whistleblower attorney who can guide you through the process while communicating with the DOJ on your behalf.

Reporting Violations of the Bank Secrecy Act as an AML Whistleblower

Regardless of what ultimately makes the most sense under the circumstances at hand, if you are thinking about reporting violations of the Bank Secrecy Act (or any of the other statutes discussed above) to the federal government, it will be important for you to make informed decisions every step of the way. To ensure that you are making informed decisions, preserving your eligibility to serve as an AML whistleblower, and helping to maximize the government’s ability to pursue a successful enforcement action, you should:

1. Protect the Information You Have in Your Possession

You should do what you can to protect the information you currently have in your possession. Keep the information in a safe place, and do not share it with anyone other than your AML whistleblower lawyer. If you are aware of additional information that you do not currently have in your possession, you may need to be careful about taking or copying this information from your employer’s premises or systems—and, before taking or copying this information, you should seek advice from experienced lawyer to ensure that you are not putting yourself at risk.

2. Discuss Your Situation with an AML Whistleblower Lawyer

While AML whistleblowers are not required to hire a lawyer to represent them, there are several important reasons to work closely with a lawyer throughout the process. Not only will an experienced lawyer be able to help you make informed and timely decisions with your best interests in mind; but, if you decide to move forward with blowing the whistle, your lawyer will also be able to prepare your whistleblower report or qui tam complaint in compliance with all pertinent federal requirements and then communicate with the appropriate federal personnel on your behalf.

3. Decide How Best to Proceed Based on the Circumstances at Hand

As discussed above, while filing a whistleblower lawsuit under the False Claims Act is one option that you might have available, you might have other options as well. You should work with your lawyer to make an informed decision about how best to proceed under the circumstances at hand.

4. Work with Your Lawyer to File an AML/BSA Whistleblower Complaint or Qui Tam Lawsuit

If you decide that you want to move forward, you should then promptly begin the process of working with your lawyer to file a whistleblower complaint or qui tam lawsuit. This can take time; and, if necessary, your lawyer can get in touch with the relevant federal law enforcement agency to confirm that you will remain eligible for protected whistleblower status.

5. Continue to Work with Your Lawyer Throughout the Process

Filing a whistleblower complaint or qui tam lawsuit is just the start of the process. Once you have initiated the process, you should be prepared to continue working closely with your lawyer going forward. This includes working with your attorney to determine what additional information you may be able to provide, ensure your identity remains confidential, and secure your whistleblower award if you become entitled to receive one.