Art & Antiquities; Beneficial Owners; Foreign Corruption — and More

We are really pleased to be moderating, once again, the Practising Law Institute’s 2021 Anti-Money Laundering Conference on May 11, 2021, starting at 9 a.m. This year’s conference again will be entirely virtual — but it will be as informative, interesting and timely as

As we have blogged, the Anti-Money Laundering Act of 2020 (“AMLA”) amended the Bank Secrecy Act (“BSA”) to expand greatly the options for whistleblowers alleging anti-money laundering (“AML”) violations and potentially create a wave of litigation and government actions, similar to what has occurred in the wake of the creation of the Dodd-Frank whistleblower

U.N. Report Focus on Improving Accountability, Transparency and Good Governance

On March 2, 2020 the United Nations released a Report on Financial Integrity For Sustainable Development (the “Report”). Although the Report is lengthy and wide-ranging, we will focus here on the portions of the Report which target the humanitarian toll of Illicit Financial Flows (IFFs) from money laundering, tax abuse, cross-border corruption, and transnational financial crime – all of which can drain resources from sustainable development, worsen inequality, fuel instability, undermine governance, and damage public trust.   We also will focus on the portions of the Report which make recommendations designed to expand anti-money laundering (“AML”) compliance.

First, the Report makes evidence-based recommendations focused on accountability, designed to close international enforcement and compliance gaps. Those recommendations include: (i) all countries enacting legislation providing for the widest range of legal tools to pursue cross-border financial crime; (ii) the international community developing an agreed-upon international standard for settlement of cross-border corruption cases, and (iii) businesses holding accountable all executives, staff, and board members who foster or tolerate IFFs in the name of the business.

Second, the Report makes other recommendations on several AML-related issues on which we have blogged: (i) each country creating a central registry of beneficial ownership information for legal entities; (ii) creating global standards for professionals, including lawyers, accountants, bankers and real estate agents; (iii) improving protections for human rights defenders, anti-corruption advocates, investigative journalists and whistleblowers; and (iv) promoting the exchange of information internationally among law enforcement officers and other authorities.

The Report clearly envisions that corporations can and should play a pivotal role in contributing resources in the fight against corruption, money laundering and cross-border financial crime. To start, Boards and management, particularly those of financial and professional service institutions, must engage in oversight to ensure that compensation, benefits, and employment itself are contingent upon financial integrity. Investors also should embrace financial integrity for sustainable development and be clear with the companies in which they invest that they expect effective anti-corruption policies and regulatory compliance. Integrity will be cultivated when organizational leadership hold board members, executives, and staff accountable if they foster or tolerate IFFs in the name of the business. Moreover, the Report observes that governments can foster financial integrity by imposing liability for failing to prevent bribery or corruption.
Continue Reading United Nations Targets Corruption and Illicit Cross-Border Finance

As we have blogged, the Anti-Money Laundering Act of 2020 (“AMLA”) amended the Bank Secrecy Act (“BSA”) to expand greatly the options for whistleblowers alleging anti-money laundering (“AML”) violations and potentially create a wave of litigation and government actions, similar to what has occurred in the wake of the creation of the Dodd-Frank whistleblower program.

We thought it would be valuable to learn how counsel for potential whistleblowers regard the AMLA and its implications.  We therefore are very pleased to welcome to Money Laundering Watch guest bloggers Mary Inman and Carolina Gonzalez of the law firm Constantine Cannon.

Ms. Inman is a partner in the London and San Francisco offices of Constantine Cannon. After 20+ years representing whistleblowers in the U.S., she moved to London in July 2017 to launch the firm’s international whistleblower practice, and she now splits her time between the London and San Francisco offices. She specializes in representing whistleblowers from the U.S., U.K., Europe and worldwide under the American whistleblower programs, including the federal and various state False Claims Acts and the Securities and Exchange Commission (“SEC”), Commodity Futures Trading Commission (“CFTC”), Internal Revenue Service (“IRS”), Department of Transportation (“DOT”) and new Treasury Department BSA whistleblower programs. Ms. Inman’s efforts to export the American whistleblower programs to the U.K., including her efforts on behalf of a successful British whistleblower, were featured in a recent New York Times article “Law Firm Sees Britain as Hunting Ground for U.S. Whistleblower Cases.” Her successful representation of three whistleblowers exposing fraud in the Medicare Advantage program was featured in the February 4, 2019 issue of the New Yorker magazine in an article entitled “The Personal Toll of Whistle-Blowing.” Ms. Inman represents renowned whistleblower Tyler Shultz who exposed the now infamous Silicon Valley blood testing start-up Theranos, and regularly speaks on lessons to be learned from this scandal.

Ms. Gonzalez is a senior associate in Constantine Cannon’s London office and a member of the firm’s International Whistleblower practice.  She represents international whistleblowers under various U.S. and non-U.S. whistleblower reward programs.  Her practice focuses on financial services fraud, foreign corruption,  and money laundering. Carolina is heavily involved in developing various practice initiatives in emerging markets like Latin America, Africa, and the Middle East.

This blog post again takes the form of a Q & A session, in which Ms. Inman and Ms. Gonzalez respond to questions posed by Money Laundering Watch about the BSA’s new whistleblower provision. We hope you enjoy this discussion regarding this important new development, and how it is regarded by potential whistleblowers and their counsel. – Peter Hardy and Meredith Dante
Continue Reading The New BSA Whistleblower Provision – From the Whistleblowers’ Perspective.  A Guest Blog.

The Occupational Health and Safety Administration (“OSHA”) now will investigate workers’ complaints of retaliation for reporting alleged money laundering and antitrust-related violations under new whistleblower statutes.  On February 19, 2021, the Department of Labor announced that OSHA would oversee whistleblower claims alleging retaliation under two laws – the Anti-Money Laundering Act of 2020 (“AMLA”) and

The AMLA Creates a Significant New Source of Risk for Financial Institutions

Second Blog Post in an Extended Series on Legislative Changes to the BSA/AML Regulatory Regime

As we have blogged, the Anti-Money Laundering Act of 2020 (the “Act”) (part of the National Defense Authorization Act (“NDAA”), passed on January 2, 2021), represents a historic overhaul of the Bank Secrecy Act (“BSA”).  One of the most important changes – and certainly one that has attracted great attention by the media and commentators – is Section 6314 of the NDAA, entitled “Updating whistleblower incentives and protections.” The Act’s expanded whistleblower provision is modeled after the Dodd-Frank Act’s whistleblower provisions, and seeks to follow in Dodd-Frank’s footsteps.  But, there are some key differences between the Act and Dodd-Frank.  The Act also creates a more limited whistleblower program specifically pertaining to foreign corruption.

Aside from expanding the potential monetary rewards, the most significant aspect of the Act is that it explicitly invites internal compliance officers of financial institutions to use the information obtained through their compliance functions in order to pursue a whistleblower reward. This provision highlights the tension between individuals and institutions, and increases the pressure on financial institutions to comply with the law, take whistleblowers seriously, and be ready to deal with employees who purport to be whistleblowers but may be pursuing their own agenda. It also is a prudent time for financial institutions to review their internal complaint procedures and assess whether any changes are warranted given this new development.
Continue Reading AMLA Adds Robust New Whistleblower Provisions for Anti-Money Laundering Violations

On December 3, the U.S. House and Senate Armed Services Committees reached an agreement on the National Defense Authorization Act (“NDAA”), an annual defense spending bill.  Within this huge bill (well over 4,500 pages) are widespread changes to the Bank Secrecy Act (“BSA”), coupled with other related changes dealing with money laundering, anti-money laundering (“AML”),

The Southern District of New York (“SDNY”) recently rejected a retaliation claim brought by a former bank employee under the Bank Secrecy Act (“BSA”), granting summary judgment in favor of the employer bank because the former employee failed to demonstrate that his firing was caused by his act of reporting a potential violation of law to the government. Although the reasoning underlying the Court’s Order is straight-forward, the case provides another reminder of the often difficult employment issues that both financial institutions and potential whistleblowers can face.

Whistleblowing as to alleged anti-money laundering (AML) violations is a growing phenomenon, perhaps best exemplified by the fact that a whistleblower precipitated the colossal Dankse Bank money laundering scandal. Previously, we blogged about a bank whistleblower case producing the opposite result as the SDNY Order here. In this post, we discuss both the BSA whistleblower statute and the SDNY Order, and, more generally, we note steps that financial institutions might take to protect themselves from liability and legitimate whistleblowers from retaliation.
Continue Reading Would-Be Whistleblower Fails to Show Causation Under the Bank Secrecy Act for Termination

The Office of the Comptroller of Currency (“OCC”) issued an extraordinary announcement regarding the decision of a former bank general counsel – Daniel Weiss, formerly employed by Rabobank, N.A. – to enter into a Consent Order in which Mr. Weiss agreed to be barred from the banking industry and pay a $50,000 fine. The Consent