WASHINGTON—Expect more AML whistleblower cases to be reported in the coming years and perhaps lawyers even publicly soliciting cases.
The Treasury Department’s anti-money-laundering whistleblower program, which was established in 2021 “but has been viewed as lacking teeth,” got a “shakeup” in the recent omnibus spending bill that lawyers predict will result in more whistleblower cases, The Wall Street Journal reported.
The legislation, which President Biden signed into law in late December 2022, contains major changes to the Treasury program, including setting a minimum potential award of 10% of monetary penalties in any enforcement action taken. The 2021 defense bill establishing the program laid out a maximum 30% cut for the whistleblower but listed no minimum, The Journal stated.
Now Accepting Tips
In addition, the program has been expanded to accept tips on sanctions-evasion violations, and whistleblowers reporting possible violations of money-laundering and sanctions law are protected from retaliation.
“The lack of a minimum award for the whistleblower, plus delays in establishing the systems for receiving and investigating tips, were key reasons why many lawyers said they were reluctant to take on anti-money-laundering whistleblowers as clients over the past two years,” the Journal reported. “But with the passing of the new legislation, many said they have started to actively solicit for clients who are looking to blow the whistle.”
Fund for Payouts Established
The new legislation also sets up a revolving fund at the Treasury Department that is to be used to pay whistleblowers with money collected from enforcement actions based on their tips.
“There were some concerns that this program was all bark and no bite; now with these additional improvements, it gives it teeth and brings it directly in line with the (Securities and Exchange Commission whistleblower award program,” Jane Norberg, a former head of the SEC program who is now a partner at law firm Arnold & Porter Kaye Scholer LLP and who works with companies on whistleblowing issues, told The Journal.
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