FinCEN Whistleblower Program
The Financial Crimes Enforcement Network (FinCEN) division of the Department of Treasury administers a Whistleblower Program that covers two categories of fraud: Bank Secrecy Act violations and sanctions violations.
History of the Program
The FinCEN Whistleblower Program was created at the end of 2020 as part of the Anti-Money Laundering Act (AMLA). The Program originally addressed violations of the Bank Secrecy Act, the law which governs the anti-money laundering compliance obligations of banks and other financial institutions. In the wake of the Russian invasion of Ukraine in 2022, Congress expanded the Program to include violations of different sanctions regimes in an effort to stop sanctioned Russian oligarchs (and other sanctioned persons) from using the U.S. to channel dirty money. Today, the Program includes both types of violations. The full text of the law is found at 31 U.S.C. § 5323.
Elements of a FinCEN Whistleblower Claim
A whistleblower may submit tips related to violations of the Bank Secrecy Act or of three sanctions laws: the International Emergency Economic Powers Act (known as IEEPA), the Foreign Narcotics Kingpin Designation Act (the Kingpin Act), and certain provisions of the Trading With the Enemy Act. You can read more about what common violations look like here.
Whistleblowers may be individuals or two or more persons who provide original information to the government. This means that the whistleblower’s information must be either derived from an individual’s knowledge or independent analysis. Whistleblowers must also submit this information voluntarily—that is, you cannot qualify as a whistleblower if you are providing information in response to a government subpoena, for example.
That information must then lead to a covered action, which means an enforcement action by either the Department of Treasury or the Attorney General. This is an unusual provision, compared to other whistleblower programs. Even though whistleblowers submit their information to FinCEN, if that information leads to an action by the Department of Justice, it may be a covered action.
FinCEN Whistleblower Process
There are currently no regulations governing the FinCEN Whistleblower Program, but they are expected shortly. In the meantime, whistleblower tips are submitted via email to the FinCEN Whistleblower Office. That office then sends the whistleblower information out to the relevant enforcement agencies—for example, FinCEN, the Office of the Comptroller of the Currency (OCC), the Office of Foreign Assets Control (OFAC), and the Money Laundering and Asset Recovery (MLARS) division of the Department of Justice. Some cases may be investigated by other agencies too, including the Department of Commerce’s Bureau of Industry and Security (BIS), the Federal Reserve, or other Treasury divisions. The FinCEN Whistleblower Program is unusual in that the subject matter touches on so many different federal agencies, some or all of which will be involved in investigating the information depending on the content.
Whichever division or agency is investigating the whistleblower information will use all the tools at their disposal to look into the information and determine if the government wishes to pursue the claim.
FinCEN Whistleblower Rewards
If the government does bring a covered action that results in monetary sanctions exceeding $1 million, the whistleblower will be entitled to a share of the proceeds, generally between 10% and 30%. Monetary sanctions include civil and criminal penalties and disgorgement. They do not, however, include forfeiture or restitution. Penalties for AML and sanctions violations can be substantial.
If a whistleblower’s information results in recoveries in related actions, the whistleblower may receive a share of those proceeds as well, as long as at least $1 million is recovered by either Treasury or the Attorney General. Related actions could include, for example, actions brought by state banking authorities, the Department of Commerce, or other related agencies.
Contact a Whistleblower Attorney
These descriptions of the FinCEN Whistleblower Program are general in nature and do not constitute legal advice. Money laundering and sanctions violations are complex and ever-evolving. The attorneys at Whistleblower Partners understand the complicated, constantly changing legal landscape and are happy to discuss any potential matter further.
If you would like more information or would like to speak to an attorney at Whistleblower Partners, please contact us for a confidential consultation.