A US law passed after Russia invaded Ukraine has given a boost to a flawed Treasury Department program that lawyers claimed deterred whistleblowers from providing tips on the role of banks in sanctions and anti-money laundering violations.
As a result, Treasury’s Financial Crimes Enforcement Network, or FinCEN, has gotten more than 100 whistleblower submissions over a three-week period this year, according to people familiar with the matter. The agency fielded just 100 tips in the program’s first two years and made no payments to whistleblowers.
Under the law enacted Dec. 29, whistleblowers can report violations of economic sanctions like those imposed on Russian oligarchs to FinCEN. Tipsters whose information leads to financial recoveries will now get minimum payments, replacing a system with no guaranteed awards.
The new law is enticing informants to provide information on a variety of misdeeds, including how banks secretly help Russian President Vladimir Putin conduct his war in Ukraine.
“It is going to hit Putin and his cohorts where it hurts,” said attorney Stephen Kohn.
Kohn represents two whistleblowers outside the US who claim a bank caters to sanctioned Russian oligarchs and entities and may have failed to flag suspicious flows of Russian money through the US, according to a redacted complaint filed with regulators. The Washington lawyer...
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