To Get the Hidden Money, You Need Whistleblowers

By Attorney Tony Munter

Let’s get the money.

Attorney General Merrick Garland is setting up a Task Force KleptoCapture, “to seize the assets of individuals and entities who violate these sanctions.” Whistleblower lawyers also have been looking to existing law to try figure out how to help get sanctioned Russian assets. My colleague, Sharoo Yazdani reports that SEC companies have a duty to report sanctions violations and that is a start. The Bank Secrecy Act, does not currently encompass all these transactions as Poppy Alexander pointed out in calling for for an expansion of its jurisdiction, but that law does not create the compulsory rewards needed to get people to provide information like the CFTC and SEC whistleblower programs. The SEC whistleblower program is not really set up to deal with sanctions, really works to fight investor fraud and a lot of the money may not even be in companies subject to the SEC.

Well intentioned as we all are, at this point, none of this is enough to get the real hidden assets. As much as we all want to help and as good a start as a task force in Justice may have on this problem, it won’t have the information to get the money.

So my question is, do you really want to get the money? To get it you will have to pay people to get the real information—whistleblowers.

Oh sure the task force may find a yacht here or there, but an oligarch can survive without a yacht. They may not be happy about it, and a captured yacht makes a nice picture, but a yacht here or there is not the point. We need to get all the assets or at least enough of them to make this effort have an impact.

We have to get at the many layers of financial engineering, the LLC’s the foreign bank accounts, the multiple layers of corporations that own other corporations, that hide the real estate, that hide the assets. There are structures inside of structures in foreign languages that control real assets that could be right next door, and we’d never know. This is how the real powers have money hidden and are personally insulated from being affected by our sanctions. There is only one way to get that information and be able to act on it.

You have to pay people to give it to you—whistleblowers.

Do you think somebody who is the world that really knows where the money is right now is in a position to come forward and speak to you without fear of their life and without anyway of surviving financially if they do? They will need a way to tell you anonymously and they will have to believe they are going to be rewarded if they do.

This does mean you will end up paying people who will not be confused with Mahatma Gandhi in their approach to human rights or life. We are not paying to make somebody a saint. We are paying to get the assets. Again, I ask do you really want to get these assets or is it just a photo of a yacht you want?

Congress with some urging from the Justice Department and or whomever, needs to take the Dodd-Frank Act, copy a few pages such as Section 748 and where it says “Commodity Futures Trading Commission,” insert Office of Foreign Asset Control (OFAC). You could also go to Section 922 and where it says “Securities and Exchange Commission” insert the same. I’m sure it would take a couple hours for a few distinguished attorneys to clean this up a bit more, but really drafting this legislation could be done in half a day. That’s about all you have to get through Congress. It would create a fund, that’s right a fund, with compulsory awards and anonymous reporting through counsel. This money though gets seized by the U.S. and the award would be a percentage of what is seized so it hardly seems like the Treasury will come out badly.

OFAC could adopt the exact same procedures in place for the SEC Whistleblower Program so lawyers know what to do and so whistleblowers in position to provide the government with information can do it anonymously. The KleptoCapture task force would then get tips including real information to get real money.

The government will have to pay whistleblowers and ok some of us lawyers will make some money too, but the government will get the assets and even when they pay an award a lot of even that reward money will come back to the U.S. Treasury in taxes. The assets will be found and the government will collect much, much more. Do you hate lawyers so much that you begrudge them money when they help you find money from what the Justice Department calls Kleptos?

To pretend a task force on its own, no matter how big and well intentioned can find the money hidden all over the world transferred through multiple layers of banks, transferred using foreign languages and practices, without somebody on the inside is absurd. Tell people we are paying for the information, paying to find the assets, suddenly the government will get the real information and find the money.

Guess what? If you don’t get information this way, nobody gets a dime in awards. Like all whistleblower reward programs, what I propose here only pays people for results.

Time is short. Congress can pass this law simply by cutting and pasting a couple of pages of the Dodd-Frank Act and we can all get to work finding the dough.

Let’s get the money. If we mean it when we sanction a regime, if we mean they should not have these assets, then we should act to get those assets. This is how.