Whistleblower Law Lawyer

Congress Strengthens the Anti-Money Laundering Act Whistleblower Program’s Enforcement Capabilities

On December 29, 2022, President Biden signed the Anti-Money Laundering Whistleblower Improvement Act (“Act”) into law amending the Anti-Money Laundering Act of 2020 (“AMLA”). The AMLA bars employers from discharging, demoting, threatening, or harassing employees who provide information about money laundering and Bank Secrecy Act violations to government officials and others, including their employer.

Whistleblower Incentives

The AMLA included plans for a whistleblower program to encourage whistleblowers to come forward to disclose wrongdoing concerning money laundering. However, the AMLA failed to detail the specifics of this program, the potential whistleblower rewards, or who would qualify as a whistleblower. These details are essential to incentivize whistleblowers to take the brave step of coming forward. 

The Act addresses all these issues and encourages more whistleblowers to come forward by improving the remedies and protections.

Potential Reward System

First, the Act specifies the range of potential whistleblower rewards. It provides that whistleblowers are entitled to at least 10% and up to 30% of any recovery of $1 million or more. One caveat, among others, is that the recovery must stem from an enforcement action based on the whistleblower’s information.

Financial Integrity Fund

The Act also establishes the Financial Integrity Fund to fund the whistleblower awards. The Department of Treasury is entrusted with administering this fund, which can hold up to $300 million from monetary sanctions collected through enforcement actions, criminal forfeitures, restitutions, and fines.

Whistleblower Eligibility

The Act also provides some much-needed clarification on whistleblower eligibility. Notably, the Act specifies that audit and compliance personnel, who often learn about unlawful conduct through everyday work responsibilities, can be whistleblowers. By granting them whistleblower status, the Act provides safeguards under the AMLA’s robust anti-retaliation employment protections, which include reinstatement, double back pay, and attorney’s fees.

Additionally, the Act clarified that whistleblowers do not have to be U.S. citizens, giving it a unique international reach compared to other whistleblower programs.

Strengthened Enforcement Capabilities

The clarifications, expansive whistleblower protections, and specific remedies implemented by the Act significantly strengthen the AMLA’s enforcement capabilities. These changes should make it substantially more attractive for potential whistleblowers to disclose violations by guaranteeing them a hefty minimum reward and strict anti-retaliation protections. Since whistleblowers can often be blacklisted within their industry, the Government must do what it can to ensure they are protected and rewarded when they come forward. 

Intended Outcomes 

On the other hand, as a whistleblower law lawyer explains best, the Act will likely force employers to pay greater attention to their compliance personnel and efforts to limit their potential liability. Employers will likely treat internal and external compliance complaints with greater care to avoid non-compliance and retaliation liability under the AMLA. Additionally, employers may strengthen their compliance mechanisms to spot and remedy potential compliance violations before they can create potential liability.

Thanks to our friends from Hoyer Law Group for their insight into the AMLA.