Sunday Read: Revisiting the McGonigal Case

National Whistleblower Center
5 min readJan 8, 2024

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The impact of the Anti-Money Laundering (AML) Whistleblower Improvement Act has been continually felt since its passage on December 29, 2022. This landmark piece of anti-corruption strengthens AML whistleblower protections and expands the AML Whistleblower Program to cover whistleblowers disclosing violations of United States sanctions.

By January 2023, the U.S. Department of Justice (DOJ) announced several charges against individuals who allegedly violated U.S. sanctions against Russia. One of the most important and high-profile cases to emerge exposed the greed of a longtime government agent who violated international law and was ultimately found guilty of money laundering and sanctions violations.

Though the charges were filed for violating another international law governing money laundering, National Whistleblower Center (NWC) explores how the AML’s momentum contributed to the sentencing of a former Special Agent in Charge of the FBI New York Counterintelligence Division. We will also discuss how U.S. agencies’ whistleblower programs protect anonymous whistleblowers who report on money laundering and sanctions evasions; these expansions have encouraged a stealth army of whistleblowers to come forward, increasing the United States ability to fight corruption in a significant way.

The Fall of Charles F. McGonigal

AML targets Russian oligarchs by establishing an effective whistleblower program to incentivize individuals across the globe to report money laundering and sanctions-busting schemes. The bill had been in front of Congress for two years and was modeled on the whistleblower provisions of the Dodd-Frank Act, which established the SEC Whistleblower Program.

Within weeks of its passage in late 2022, the DOJ announced high-value and high-profile charges covered by the new AML law.

On January 23, 2023, the DOJ charged Charles F. McGonigal, a former Special Agent in Charge of the FBI New York Counterintelligence Division, and Sergey Shestakov, a former Soviet and Russian diplomat with violating U.S. sanctions against another Russian oligarch, Oleg Deripaska. Reports indicated that Deripaska had close ties to Russian President Vladimir Putin.

The DOJ asserted that in 2021 McGonigal and Shestakov, “conspired to provide services to Deripaska, in violation of U.S. sanctions imposed on Deripaska in 2018.” McGonigal had direct knowledge of the sanctions and he and Shestakov were arrested for violating the International Emergency Economic Powers Act (IEEPA) by money laundering and conspiring to commit money laundering.

As previously mentioned, McGonigal’s arrest was especially significant, as he is reportedly one of the highest-ranking former FBI officials ever charged with a crime.

The DOJ noted that as an FBI official, McGonigal helped investigate Deripaska and other Russian oligarchs. As a special agent, he supervised investigations into sanctions violations. Still, he began building a relationship with an agent of Deripaska, in the hopes of doing business with Deripaska after he retired from the FBI. McGonigal pled guilty in August and on December 14, 2023, was sentenced to 50 months in prison for his actions. McGonigal was ordered to surrender to prison on February 26 of this year.

“Charles McGonigal’s conduct can be summed up in one word — betrayal,” said Executive Assistant Director Larissa L. Knapp, of the National Security Branch, when announcing the sentencing. “He betrayed everything he once swore to protect.”

NWC Executive Director Siri Nelson noted that while the result sent a message to anyone engaged in money laundering or violating sanctions, the sentencing could have been stronger.

“50 months is a slap on the wrist for such a huge betrayal. When government officials compromise U.S. interests because of greed, they should be punished severely for undermining public trust and rule of law. The AML Whistleblower Program promises to root out these bad actors wherever they are.”

More AML Enforcement Ahead:

Another arrest was made in January 2023 to further stress the importance of AML’s monetary rewards.

On January 20, 2023, DOJ announced charges against a Russian national and a United Kingdom national, for allegedly facilitating a sanctions evasion and money laundering scheme concerning the Tango, a $90 million 255-foot luxury yacht owned by sanctioned Russian oligarch Viktor Vekselberg.

A whistleblower whose information led to the arrest and seizure could have qualified for up to 30% of the yacht’s value and any sanctions that Viktor Vekselberg will face.

“The hidden gem within the AML Whistleblower Improvement Act was its ability to incentivize whistleblowers from inside Russia and Russia’s trading partners,” said NWC co-founder and Board Chairman Stephen M. Kohn, Esq. in an interview with Whistleblower Network News. “Given the law’s transnational reach, citizens from countries with financial or trade relations with Russia will have the ability to safely and effectively blow the whistle and help U.S. authorities seize sanctioned Russian wealth.”

Money Laundering, Confidentiality and Whistleblowing

AML and the Dodd-Frank Act cover a variety of crimes and illegal activities related to:

  • Sanctions evasion,
  • Foreign bribery,
  • Securities and commodities trading,
  • Violations of the Bank Secrecy Act,
  • And of course, money laundering.

Both the AML and DFA laws establish the right for whistleblowers, including foreign nationals, to apply for monetary rewards for providing information about foreign bribery that leads to the successful enforcement of the Foreign Corrupt Practices Act (FCPA). Under these provisions whistleblowers also have the right to remain anonymous as long as they have an attorney working on their behalf. If you have information about financial crime and are looking for an attorney, please consider filing out this confidential intake form for whistleblowers.

Rules for Whistleblowers: A Handbook For Doing What’s Right provides deep insight into how the programs’ effectiveness can be attributed to the statutory right to file anonymously.

After monitoring its whistleblower program for years, the SEC described the law permitting anonymous filing as “critically” important, “[encouraging] company insiders and others to come forward by lessening their fear of potential exposure.”

In Rules, author and NWC co-founder and Board Chairman Stephen M. Kohn, Esq., delves into the expansion of confidentiality protections and explores some of the intricacies. For example, Dodd-Frank, AML, and tax whistleblower laws differ from typical complaints in state and federal courts, and Kohn details the special online-only form that must be completed.

“However,” Kohn noted, “if the whistleblower, without an attorney, files [their tip] online, the case is not covered under the anonymity provisions of the law.”

When putting money laundering under the microscope further, Kohn noted in Rules that the crime is “quintessentially transnational in nature.” Thankfully, the IRS whistleblower program expanded its protections include those who confidentially disclose any violations of U.S. tax laws, and is also covered via the IRS criminal division upon investigation of asset forfeiture and money laundering.

This is a key reason why NWC cautions potential whistleblowers from reporting without first speaking to a whistleblower lawyer to learn their rights and what whistleblower protections they have. Confidential, anonymous reporting, financial rewards, and effective enforcement are keys to successful whistleblower programs. Penalties against Charles McGonigal are an example of the much needed enforcement that motivates whistleblowers to come forward with high quality information.

Support NWC

NWC fights to bolster whistleblower programs and inform the public about whistleblower laws. As a 501(c)(3) non-profit our awareness building work is made possible with the support of our generous donors. By donating $100, you can support future whistleblower efforts and receive a complimentary copy of Rules for Whistleblowers: A Handbook For Doing What’s Right.

This story was written by Justin Smulison, a professional writer, podcaster, and event host based in New York.

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National Whistleblower Center

National Whistleblower Center is the leading nonprofit working with whistleblowers around the world to fight corruption and protect people and the environment.