Bank employees may report False Claims Act violations occurring within their workplace. The Federal Reserve Board’s website notes that employers cannot retaliate against whistleblowers. Individuals filing reports about a company’s misconduct have protection from retaliatory termination.
A whistleblower may choose to remain anonymous. Compiling evidence of financial misconduct could, however, involve reviewing complex records. Whistleblowers may consider receiving professional help before submitting claims.
Unlawful actions include unreported transactions and poor due diligence
To avoid penalties, banks must follow state and federal laws, They must also follow certain operating procedures. Laws, for example, require banks to report transactions involving at least $10,000 in cash. Employers operating in ways that prevent filing the required reports may have violated federal or state laws.
Bank officers and directors owe a fiduciary duty to act in good faith. This includes maintaining policies for employees to follow regarding reporting requirements. Employees must also perform due diligence or background checks on their customers. If an employer encourages lax due diligence, employees may file a whistleblower claim to report violations.
U.S. Justice Department settles with bank alleged to have funded an unlawful business loan
As reported by BankingDive.com, the U.S. DOJ agreed to settle with a Texas bank that allegedly violated the False Claims Act. When a customer applied for a business loan authorized under the Paycheck Protection Program, he incorrectly checked a box claiming “no” on the application. Had he checked off “yes,” he would have been ineligible for the loan. Employees allegedly approved and processed the application, which resulted in the bank receiving about $20,000 as a processing fee. The bank agreed to pay the amount back.
Whistleblowers play a vital role in exposing unlawful acts involving government programs and financial institutions. The law recognizes the value of their efforts and provides protection from retaliation.