The Financial Crimes Enforcement Network (FinCEN) is one of a handful of federal authorities that have adopted whistleblower programs focused on facilitating enforcement in hard-to-target areas. While FinCEN focuses its enforcement efforts primarily in the areas of Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance, its enforcement authority is much broader—and it has taken steps to enhance its enforcement capabilities in recent years.
These steps include making changes to its whistleblower program to streamline the process for those seeking to report anti-money laundering violations related to suspicious activity reports and other issues, and enhancing the rewards that are available.
With this in mind, today there are several reasons to consider serving as a FinCEN whistleblower. Not only can whistleblowers assist FinCEN with anti-money laundering enforcement in critical and hard-to-target areas, but they can also personally benefit from doing so. Whistleblower rewards from FinCEN have the potential to be substantial, and whistleblowers can hire a law firm to represent them at no out-of-pocket cost.
“Whistleblowers play a critical role in FinCEN’s efforts to uncover BSA and AML violations, sanctions violations, and other violations impacting financial institutions and the U.S. financial markets. Not only are FinCEN whistleblowers entitled to confidentiality and protection against retaliation, but they will also be entitled to financial rewards in many cases.” – Dr. Nick Oberheiden, Founding Attorney of Oberheiden P.C.
What Prospective Whistleblowers Need to Know About Submitting a Tip to FinCEN
Individuals who are considering coming forward as a FinCEN whistleblower have several important factors to take into account. For example, here are 10 important facts about FinCEN’s whistleblower program:
1. FinCEN Has Been Trying to Encourage Whistleblowers to Come Forward
After initially launching its AML whistleblower program with little fanfare, FinCEN has been trying to encourage whistleblowers to come forward in recent years following the passage of the AML Whistleblower Improvement Act. As FinCEN recently explained:
“The Anti-Money Laundering Whistleblower Improvement Act, which was enacted as part of the Consolidated Appropriations Act [of] 2023 . . . further enhanced FinCEN’s whistleblower program by: (i) establishing a $300 million revolving fund (Financial Integrity Fund) to pay eligible whistleblowers; (ii) expanding the whistleblower program to include awards for violations of U.S. economic and trade sanctions programs . . . ; and (iii) providing for the payment of awards to eligible whistleblowers that are equal to 10 to 30 percent of what has been collected of the monetary sanctions imposed in a covered enforcement action.”
As FinCEN went on to explain, it “expects the establishment of [the Financial Integrity Fund] will very likely increase interest and participation in FinCEN’s whistleblower program.” This makes it clear that FinCEN wants to hear from whistleblowers—and it is prepared to compensate those who provide material assistance with identifying targets for enforcement actions involving suspicious cash transactions and other issues. We discuss FinCEN’s whistleblower reward fund in greater detail below.
2. FinCEN Accepts Whistleblower Complaints Involving BSA, AML, and Other Violations
FinCEN accepts whistleblower complaints involving a wide range of statutory and regulatory violations. Along with violations of the Bank Secrecy Act and Anti-Money Laundering Act of 2020, this includes violations of the National Defense Authorization Act, International Emergency Economic Powers Act (IEEPA), Trading with the Enemy Act (TWEA), and various other sources of federal authority.
Notably, FinCEN also accepts whistleblower complaints involving violations of Office of Foreign Assets Control (OFAC) sanctions, which can pose significant threats to the integrity of the financial system. Similar to FinCEN, OFAC is a component of the U.S. Treasury Department. OFAC’s economic and trade sanctions restrict financial transactions with specified foreign parties, and violations can expose all parties involved to substantial penalties.
3. FinCEN Whistleblowers Are Entitled to Confidentiality (or Anonymity)
Individuals who come forward as FinCEN whistleblowers are entitled to strict confidentiality, along with robust whistleblower protections under federal law. Similar to other federal authorities that have implemented whistleblower programs, FinCEN has a stated commitment to protecting whistleblowers’ identities by all legal means available.
However, FinCEN whistleblowers can also report AML violations and other issues anonymously if they so choose. In this scenario, legal representation is essential, and whistleblowers must still generally be prepared to disclose their identity in order to collect a whistleblower reward (if the information they disclose through their legal counsel leads to a successful enforcement action).
4. FinCEN Whistleblowers Are Entitled to Protection Against Retaliation
In addition to confidentiality protections, FinCEN whistleblowers are also entitled to employment protection under federal anti-retaliation provisions. While it is unlikely that whistleblowers’ employers will discern their identities in most cases, federal law still strictly prohibits retaliation against bank employees and other who report violations.
Along with prohibiting whistleblower retaliation, federal law also provides clear remedies in cases in which whistleblowers expose financial crimes and experience unlawful adverse employment actions. If you blow the whistle with FinCEN and your employer retaliates against you unlawfully, your lawyer will be able to help you seek back pay with interest, additional damages, reinstatement, and/or other appropriate remedies.
5. FinCEN Whistleblower Rewards Range from 10% to 30% of the Amount Recovered
As discussed above, FinCEN’s whistleblower program now includes provisions for whistleblower compensation. Specifically, whistleblowers who help FinCEN pursue successful enforcement actions for BSA, AML, and economic and trade sanctions violations can receive between 10% and 30% of the amount FinCEN recovers.
To be eligible for a reward, a whistleblower must assist FinCEN with recovering at least $1 million. However, most FinCEN enforcement actions will involve amounts in controversy that far exceed this threshold, including cases where violations--such as poor customer due diligence--contribute to broader anti-money laundering failures. When determining the specific percentage of a FinCEN whistleblower award, FinCEN considers factors including the volume and materiality of the information provided, the whistleblower’s level of assistance during the government’s investigation, and the severity of the violation at issue—among other factors. Whistleblowers’ lawyers can play a role in this part of the process as well.
6. FinCEN Works Closely with Other Federal Law Enforcement Authorities in Many Cases
While FinCEN pursues enforcement activities on its own, it also works closely with other federal law enforcement authorities, often in connection with its expanded sanctions whistleblower program. Along with OFAC, these include the U.S. Department of Justice (DOJ), U.S. Securities and Exchange Commission (SEC), and U.S. Commodity Futures Trading Commission (CFTC). Given FinCEN’s recent focus on working with whistleblowers, those who have information involving a money-transmitting business or any other entity that may be of interest to FinCEN may choose to make FinCEN their first point of contact.
With that said, it is worth noting that the SEC and CFTC have whistleblower reward programs as well, and the DOJ has instituted various pilot programs in recent years (in addition to handling whistleblower cases under the False Claims Act). With this in mind, prospective whistleblowers will want to think carefully about where they file their complaints, especially when sanctions laws are involved—and an experienced whistleblower lawyer should be able to help them make an informed and strategic decision.
7. There Are Strict Eligibility Criteria for Securing Protected Whistleblower Status
In all cases, there are strict eligibility criteria for securing protected whistleblower status. While the eligibility criteria under most federal whistleblower programs (including FinCEN’s whistleblower program) are similar, it is imperative that whistleblowers focus on the specific eligibility criteria for the program under which they intend to file. An experienced whistleblower lawyer should be able to help here as well—not only with assessing eligibility, but also with documenting, preserving, and proving eligibility to the extent necessary.
This is critical for prospective FinCEN whistleblowers to keep in mind. To secure protected whistleblower status under the AML Act, simply contacting FinCEN is not enough. Going public also generally does not count as whistleblowing under federal law. Instead, prospective whistleblowers must ensure that they are prepared to submit qualifying information directly to the government, and they must submit their information in accordance with the requirements established by FinCEN’s Office of the Whistleblower.
8. There Are Additional Eligibility Criteria for Securing a Whistleblower Reward
For FinCEN whistleblowers who are interested in claiming a financial reward, there are additional eligibility criteria to consider as well. For example, in addition to the requirement for the amount at issue to exceed $1 million, there are restrictions on compensation awards for whistleblowers who were involved in the sanctions violations they are reporting. With this in mind, if you are interested in seeking a FinCEN reward, this is something that you will want to specifically discuss with your lawyer before you move forward.
9. There Are Many Reasons to Consider Coming Forward as a FinCEN Whistleblower
While seeking a financial reward is understandably a motivator for many prospective whistleblowers—and this is precisely why FinCEN offers these rewards—there are many reasons to consider coming forward if you have information related to money laundering, sanctions violations, or other issues that FinCEN might want to know.
Among them, disclosing BSA, AML, terrorist financing, and sanctions-related violations is unquestionably the right thing to do. These violations can lead to substantial taxpayer losses, compromise national security, jeopardize foreign policy interests, and, as highlighted by the Financial Action Task Force, have a variety of other serious adverse consequences. As a result, regardless of your interest in (or eligibility for) a whistleblower reward, it is well worth talking to a lawyer about coming forward.
10. Hiring a Lawyer to Assist with Filing a FinCEN Whistleblower Tip Costs Nothing Out-of-Pocket
Finally, if you are considering submitting a whistleblower tip to FinCEN, you can, and should, hire a lawyer to assist you at no out-of-pocket cost. Serving as a FinCEN whistleblower is a complicated—and at times stressful—process. You need to ensure that you are making informed decisions, and you will want to put yourself in a position to assist FinCEN with gathering actionable financial intelligence to the greatest extent possible. An experienced attorney will be able to help you every step of the way, including working with FinCEN on your behalf to report suspicious transactions and secure your whistleblower reward if warranted.
