Witnessed Money Laundering?

Whistleblower Lawyer Explains What to Do

Video Transcript:

Jason Brown:

If you know of money that's flowing indirectly to an entity that would be prohibited from doing it directly, then there may be money laundering going on.

Rob Rosenthal:

Can you blow the whistle if you know someone who's money laundering and how do you do that? Well, we're going to find out today, because that's what we're going to ask the lawyer.

Hi again, everybody, I'm Rob Rosenthal with askthelawyers.com, and my guest is New Jersey-based attorney Jason Brown. Jason, good to see again. Thank you for helping us out today.

Jason Brown:

Nice to see you as well.

Rob Rosenthal:

So let's just start at the basics, because I bet most of us don't really understand what money laundering is.

Jason Brown:

Well, money laundering is really the movement of cash or cash equivalent to avoid detection by the United States government, and it's often used to hide other underlying conduct, although not always. The imagery comes from theoretically washing the money, so it's clean. And a classical example, ironically, deals with a laundry mat, where a laundry mat may be used to flow cash through and report it to a bank to hide underlying criminality or other activity. So there's a couple industries in which money laundering is seen quite a bit. First, I guess the emerging topic would be with cryptocurrency and bitcoins; they're certainly off to a bullish start to the year. For drugs, not pharmaceutical necessarily, but recreational drugs. There's a tension that goes on because different states have made recreational drug selling legal, but the federal government has not, so you're prohibited from using the banks. But you also have overzealous individuals who haven't had permission through even their state to sell marijuana that were doing so and trying to use the banks. And the third example of money laundering vehicles is from restricted countries. There are certain prohibitions from certain countries to invest in United States businesses, but people do it indirectly. I think a good rule of thumb to think about is, if you know of money that's flowing indirectly to an entity that would be prohibited from doing it directly, then there may be money laundering going on.

Rob Rosenthal:

So it sounds to me, Jason, that you could be talking about everything as small and simple as a laundromat up to big, major money moving businesses.

Jason Brown:

It could be huge; there could be big businesses actually laundering money to avoid detection from activity they've done abroad which may be questionable, but the purpose behind money laundering is kind of interesting; They still want to be able to use and utilize that money and therefore, they need to use the banks. so there's a tension that goes on between the IRS whistleblowing statutes and the new money laundering statute that was just passed.

Rob Rosenthal:

Well, then let's talk about that. Somebody knows about money laundering; they know what's going on. How do they report it? What's the process?

Jason Brown:

Well, they really should speak with an attorney that is experienced in the different areas of whistleblowing law in a whistleblower law firm. Our firm, fortunately, as a former FBI Special Agent and legal advisor, this is a focus of our practice.

There's a couple of avenues to report money laundering; one is directly with law enforcement. If you do that, they can't really guarantee anything for you; they will try to use you as a source, and there's no upside, but with this brand new whistleblowing statute, if you use the right whistleblower law firm you even have the potential to stay anonymous from start to finish.

Rob Rosenthal:

So tell us some more about this new statute.

Jason Brown:

Well, let me start by saying, if you thought 2020 was surprising, 2021 Congress actually passed a useful statute to combat money laundering. It took a statute that was essentially impotent and made it verile and vital. In the past, money laundering was addressed by something called the Bank Secrecy Act, but where it failed was that it only allowed a whistleblower to potentially receive up to $150,000, and it was purely discretionary on behalf of the government. So nobody wanted to really risk it all for a potential $150,000 award if and when the government felt that it was an appropriate award. Now Congress has made it patterned after the SEC Whistleblower Statute, and we could talk about that in a little bit if you want to, but the statute now provides whistleblowers a way to receive up to 30% of what the government recovers. If you do the math, it's speculated that last year alone, there was two trillion dollars worth of money that was laundered. 30% of that is roughly $600 billion that might be eligible for whistleblowers who could turn individuals and entities in who have been laundering money.

Rob Rosenthal:

Oh, so that could be significant. So do you foresee then that there's going to be a lot more people with motivation to blow the whistle on these things?

Jason Brown:

I definitely think so. If you look at the SEC Whistleblower Statute, which really hasn't been enacted robustly and worked through in the last five, six years, there's hundreds of millions of dollars that were given to whistleblowers who blew the whistle through that mechanism. Now you have so many more added benefits, and a potentially really exponential upside by 30% of a recovery. It strongly incentivizes whistleblowers to do the right thing who know about wrongful money laundering conduct, to come forth and blow that whistle.

Rob Rosenthal:

So you've told us to contact a whistleblowing firm before you contact the police. What about a lot of these companies that have their own reporting channels, Jason? Call this 800 number and report if you know of wrongdoing. What about that?

Jason Brown:

If you're looking to get fired, that's a good start. Those are generally one-way tickets to getting yourself fired. You definitely need to speak with a professional before you go through the internal compliance hotlines at the different companies. And I challenge individuals, if you want to even ask certain questions before you blow the whistle internally, you really should speak with an attorney, but if you don't, ask that company when you're speaking to the company attorney, who does that company attorney work for? Do they work for you, the potential whistleblower or the person reporting the conduct? Or the company? And if there's a conflict, who do they represent? And they'll tell you they represent the company. And what does that tell you about what their function is? Not to protect you, and not to help you, but to help the company at the end of the day. So if you want to get fired abruptly, yeah. Report it through the internal mechanisms, but if you really want to do the right thing and understand what your options are, speak with an attorney first who can guide you through the process.

Rob Rosenthal:

No one wants to get fired. So, what protections are there for whistleblowers? What can they do to make sure their life isn't ruined by doing this?

Jason Brown:

There's quite a few strident protections, particularly in this new anti-money-laundering act. They took the good parts of all the prior statutes, and they really want to protect the whistleblower in earnest with this piece of legislation. You could potentially stay anonymous from start to finish, so they may not even know who you are. In the event that you are outed, it calls for reinstatement, double back pay, attorneys fees and costs. So there's a lot of teeth and mechanisms to make sure that you're not retaliated against. As a firm, we would be remiss unless we educated our clients about what's likely to happen and why, and understanding when you should think about your parachute about leaving the company if things get too hot. We've been through it so many times; we are dedicated to protecting whistleblowers. And our firm at least, we don't just treat a client as a piece of economy, we treat somebody who is courageous enough to blow the whistle and work with our firm as a friend, and we want to educate them about what their options are early, even before they commence the action.

Rob Rosenthal:

Well let's say there's somebody that’s maybe not 100% sure that what is going on is illegal or improper. What is your advice? Let’s talk about that. If somebody thinks they know there's some wrongdoing going on, what do you advise?

Jason Brown:

Well, let me talk about what they shouldn't do; they shouldn’t all of a sudden be a cowboy or a cowgirl and try to gather evidence on their own, which is likely to raise suspicion and flags and get them fired as well. They should consult with a law firm. We strongly encourage people to speak with our law firm. As I indicated, I have an FBI background; our law firm in the past has had hundreds of millions of dollars of recovery although nothing in the future is ever guaranteed, but we protect whistleblowers. We're dedicated to protecting whistleblowers. We offer free consultations and confidentiality during those consultations. Now, even if it's not with our firm, you need to speak with a firm that has navigated in the past all these different statutes and can educate you on their options. So please speak with a firm that has a strong focus in whistleblowing law, or else a mom and pop shop may not steer you in the right direction.

Rob Rosenthal:

And your firm specifically, Jason, you will work with whistleblowers all over the country, right?

Jason Brown:

Correct. We really like to litigate all over the country. A lot of time, there's an advantage to having someone from out of town—particularly if there's some big enterprise going on that's illegal. Sometimes those big entities know the local lawyers; I'm not suggesting it happens all the time, but there's a charm to taking in a nimble team from out of town in order to address it and get really a detached opinion about what to do next and why.

Rob Rosenthal:

It's always interesting, and I always learn something when we talk, Jason. Thank you so much for helping us out today.

Jason Brown:

And thank you.

Rob Rosenthal:

Well, that's going to do it for this episode of Ask the Lawyer. My guest has been New Jersey-based attorney Jason Brown. Remember, if you want the best information or you want to make sure you can choose a lawyer that lawyers choose, go to askthelawyers.com first. Thanks for watching. I'm Rob Rosenthal with AskTheLawyers™.

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