Leading Whistleblower Attorney Explains Dangerous Loophole in Anti-Money Laundering Act

Treasury Department Federal Credit Union.

On February 4, leading whistleblower attorney Stephen M. Kohn had an article published by JD Supra entitled “Loopholes Doom Money Laundering Anti-Retaliation Law.” The article denounces the recently passed Anti-Money Laundering Act (AML Act), which contains loopholes that whistleblower advocates claim will undermine the law. In this article, Kohn, a partner at whistleblower firm Kohn, Kohn, & Colapinto and Chairman of the Board of the National Whistleblower Center, focuses on one specific loophole of the law: it does not extend anti-retaliation protections to employees of Federal Deposit Insurance Corporation (FDIC) or Credit Union insured institutions.

The AML Act was passed in January as part of the National Defense Authorization Act of 2020. The AML whistleblower law aims to incentivize individuals to blow the whistle on money laundering to the Department of Treasury. Kohn explains that while the AML Act “includes an anti-retaliation law modelled on the ‘best practices’ included in most modern whistleblower protection laws,” it also includes a significant “carve-out” which explicitly excludes certain groups of employees from these protections. Because of the carve-out, the protections do not apply to employees of FDIC-insured financial institutions and insured credit unions.

According to Kohn, “this carve-out will have devastating consequences on AML whistleblowers.” He writes that the carve-out is vast and will effectively exclude employees at all U.S. banks, forcing these excluded employees to rely on older AML laws which Kohn describes as “completely ineffective.” 

Kohn also details the role big banks played in writing this loophole into the law. According to Kohn, the largest banks in America all publicly endorsed the AML Act. Kohn states “given the loopholes in the whistleblower law, is it any wonder why the big banks endorsed the AML Act?”

Read:

Loopholes Doom Money Laundering Anti-Retaliation Law

The AML Whistleblower Law: Don’t Put Lipstick On a Pig

Exit mobile version