By Jeffrey A. Newman, Esq. MBA (with some research on AI)
When the Money Trail Leads to an Adversary: An Insider’s Guide to Blowing the Whistle on Export, Tariff, and Securities Fraud
I have spent enough years (45 years) around trade finance and compliance to know what a clean transaction looks like. I also know when one doesn’t. Lately I have been seeing more of the second kind âi and if you work at a bank, a brokerage, a logistics firm, an importer, or any company that touches cross-border money and goods, I suspect you have too.
Something has shifted. The volume of deals that quietly route American money, technology, or goods toward Iran, China, Russia, and other adversaries has gone up, not down, even as the government has piled on sanctions and tariffs. That is not a coincidence. When the rules get stricter, and the penalties for following them (higher duties, blocked markets, lost customers) get steeper, the temptation to cheat goes up too.
This wave really has three faces, and they often overlap in the same deal. There is **export and sanctions fraud** ai” moving money, technology, or goods to a prohibited party. There is **tariff and customs fraud** — lying about what imports are, what they cost, or where they came from, to dodge the duties owed on them. And there is **securities fraud** — publicly traded companies that hide all of the above from their own investors and regulators, or bribe their way into these markets, and then paper over it in their books. Frequently the same scheme touches all three: a public company sources restricted goods through a sanctioned supplier, mislabels their origin to cut its tariff bill, and never breathes a word of the risk to shareholders.
The people running these schemes are often not cartoon villains. Some are wealthy, respectable-looking businessmen with lawyers and letterhead. And more often than most people realize, a U.S. bank is somewhere in the chain — sometimes knowingly, sometimes because its controls failed.
If you are the person who noticed, this piece is for you. There are now at least six separate federal programs that will pay you a share of what the government recovers, and protect you from being fired for coming forward. Knowing which one fits your situation is half the battle. Let me walk you through what I have learned.
## The pattern, in plain terms
The schemes rhyme, even when the products differ. A few of the recurring shapes:
**Transshipment.** Goods that are really made in China (or contain restricted technology bound for Russia) get routed through a third country — Taiwan, Malaysia, the UAE, Turkey — and re-papered so they appear to originate somewhere innocent. “Transshipment” just means moving cargo through an intermediate country to disguise where it actually came from or where it is actually going.
**Front companies and “shadow banking.”** A wealthy operator sets up a string of trading companies often called “general trading companies” that look like ordinary businesses but exist to move money for a sanctioned party. Treasury has publicly warned that Iran-backed networks lean heavily on exactly this: third-country front companies and currency exchange houses that plug into the global financial system through **correspondent accounts** at U.S. banks. (A correspondent account is simply an account one bank holds for another bank, usually to process dollar transactions. It is the on-ramp that lets foreign money touch the U.S. system.)
**Undervaluation and misclassification.** An importer lies about what goods cost, or files them under the wrong tariff code, to pay less in duties. Trade experts have flagged a striking drop in the declared value of Chinese shipping containers — a signal that some importers are systematically understating value to dodge tariffs.
**Concealed ownership.** The person actually pulling the strings hides behind shell entities so the money and the decisions can’t be traced back to a sanctioned individual or a designated country.
**Concealment from investors.** When the company doing any of this is publicly traded, there is a second lie stacked on top of the first: the one told to shareholders. Material exposure to a sanctioned market gets left out of disclosures. Illicit revenue gets booked as something clean. Bribes paid to win a foreign contract get logged as “consulting fees.” The fraud on the government and the fraud on investors become the same set of falsified records.
None of this works without help from inside legitimate institutions — the compliance officer who is pressured to look away, the trade-finance banker who processes the letter of credit, the accountant who books the phony invoice. Which is exactly why insiders are the government’s single most valuable source, and why there is money on the table for the ones who speak up.
## Six doors you can knock on
Here is the part people find genuinely confusing: there is no single “sanctions whistleblower hotline.” There are several programs, each run by a different agency, each covering a different slice of the problem. Picking the right one matters, because a few of them will not pay you if you were eligible under another. Here is how I think about each.
### 1. FinCEN — the most direct fit for money moving to adversaries
If your knowledge is about a bank or financial institution — money laundering, gaps in the anti-money-laundering controls, or transactions that violate U.S. sanctions — the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) runs the program built for you.
FinCEN’s Anti-Money Laundering and Sanctions Whistleblower Program covers violations of the Bank Secrecy Act (the core U.S. anti-money-laundering law, which requires banks to monitor and report suspicious activity) and of the major sanctions statutes — the International Emergency Economic Powers Act (IEEPA, the law behind most modern sanctions), the Trading With the Enemy Act, and the Foreign Narcotics Kingpin Act. Congress strengthened this program in 2022 to add sanctions evasion and to guarantee a **minimum** award, and Treasury is now formalizing it: FinCEN published a detailed proposed rule on April 1, 2026 to fully operationalize the program, with the public comment window closing June 1, 2026.
The reward is 10% to 30% of the monetary penalties the government collects, in any case where those penalties top $1 million. Under the proposed rules, when 30% would come to $15 million or less, there is a presumption you get the full 30%. Notably, you do **not** have to be a U.S. citizen, and the violations do not have to have happened on U.S. soil. Given how much of this activity runs through foreign front companies and exchange houses, that international reach matters. To see the scale of what these cases can be worth: one large bank recently paid roughly $3 billion to settle anti-money-laundering failures.
### 2. The DOJ Criminal Division — when it’s a crime, not just a compliance failure
In August 2024 the Department of Justice launched its Corporate Whistleblower Awards Pilot Program, and in May 2025 it expanded the program’s scope specifically to add **sanctions offenses; trade, tariff, and customs fraud; material support of terrorism; and cartel or transnational-criminal-organization activity.** That expansion was aimed squarely at the pattern I described above.
This is the door for genuinely criminal conduct — deliberate sanctions-busting, knowing evasion, the kind of thing that ends in indictments and asset seizures. The award can reach up to 30% of the first $100 million the government forfeits, plus up to 5% of anything forfeited between $100 million and $500 million, in cases where the forfeiture (the government’s legal seizure of criminally-derived assets) tops $1 million.
Two important cautions. First, this program will **not** pay you if you were eligible for an award under one of the other federal programs — DOJ designed it to fill gaps, not to let you double-dip. Second, if you “meaningfully participated” in the scheme — if you directed, planned, or knowingly profited from it — you are disqualified. Being among the least culpable people involved is survivable; being an architect is not. And awards here are entirely at DOJ’s discretion.
### 3. The False Claims Act — the tariff and customs lane
This one is older and, in my view, underappreciated for trade cases. The False Claims Act lets a private individual (called a “relator”) file a lawsuit on the government’s behalf. The Latin term for it is *qui tam*, and it works like this: you file your complaint **under seal** — meaning it stays secret while the government investigates and if there is a recovery, you get a cut.
The key concept for our purposes is the “reverse false claim.” A normal false claim is lying to get money *from* the government. A *reverse* false claim is lying to avoid paying money you *owe* the government — and customs duties and tariffs are exactly that kind of obligation. So an importer who fakes a country-of-origin declaration, misclassifies goods, or undervalues a shipment to dodge duties has, under this law, effectively defrauded the United States.
The rewards are substantial: 15% to 25% of the recovery if the government joins your case, and 25% to 30% if it declines and you press on with your own lawyer. Damages are **trebled** — the government can recover three times what it was cheated out of — so recoveries add up fast. In one recent case an importer paid $54.4 million over evaded duties on Chinese products routed through Taiwan, and the whistleblower received roughly $9.75 million. The government’s 2025 fiscal year was the biggest in the statute’s history, and a new DOJ Homeland Security Trade Fraud Task Force, launched in 2025, is openly encouraging insiders to come forward.
One caveat: the False Claims Act is the right tool for **customs and tariff** fraud (money owed to the government), not for pure sanctions violations that don’t involve a financial obligation to Uncle Sam. For those, look back at FinCEN or DOJ.
### 4. The SEC when a public company hides the truth
If the wrongdoer is a publicly traded company (an “issuer,” in the jargon — a company that has issued stock to the public), the Securities and Exchange Commission’s program is often the strongest fit, and it is the one insiders in finance, accounting, and internal audit are best positioned to use. A public company owes its investors the truth, and there are several distinct ways these schemes break that duty:
– **Disclosure failures.** A company must tell investors about risks that a reasonable investor would consider material. If it is quietly doing business tied to a sanctioned regime, or is exposed to an adversary market it never discloses, hiding that exposure can itself be a securities violation.
– **Foreign bribery.** The Foreign Corrupt Practices Act (the U.S. anti-bribery statute) makes it illegal for a company to pay foreign officials to win or keep business. Greasing a deal in one of these markets is a classic trigger.
– **Books-and-records and internal-controls violations.** This is the quiet one, and often the easiest to prove. The FCPA also requires public companies to keep accurate books and maintain real financial controls. When bribes get logged as “consulting fees,” or prohibited sales get booked as ordinary revenue, or invoices are falsified to disguise where goods came from, the false accounting is itself a violation — even before anyone proves the underlying scheme.
– **Accounting fraud.** Inflating revenue from these deals, or hiding the liabilities and penalties they create, misleads the market about what the company is actually worth.
The point worth holding onto: you do not have to single-handedly prove the whole sanctions or tariff scheme to have a strong SEC case. If you can show the company lied in its filings or its books about any of it, that is often the cleaner path — and it is exactly the kind of evidence a controller, auditor, or finance-team insider tends to have.
The SEC pays 10% to 30% of the sanctions collected in any case exceeding $1 million. This is the most established of these programs — since 2011 the SEC has collected over $6.3 billion and paid whistleblowers more than $2.2 billion. You can file anonymously, provided you do so through a lawyer.
### 5. The CFTC — when it touches commodities and derivatives
The Commodity Futures Trading Commission runs a near-identical program for violations of the Commodity Exchange Act — fraud or manipulation involving futures, options, swaps, and commodities. If the scheme you have seen touches commodity trading, energy markets, or derivatives (financial contracts whose value derives from an underlying asset), this is your agency. Same 10%-to-30%-over-$1-million structure; the CFTC has paid out roughly $370 million to date.
### 6. The IRS — because these schemes usually hide income too
Sanctions evasion and trade fraud almost always leave a tax trail: unreported offshore income, hidden foreign accounts, phony deductions to disguise where money went. The IRS Whistleblower Program pays a mandatory award — generally 15% to 30% of what the government collects — in cases meeting its dollar thresholds (broadly, where the amounts in dispute exceed $2 million). If the fraud you have seen has a tax dimension, this can run alongside another claim.
## How to actually do this without getting burned
A few hard-won principles, from watching how these things go.
**Documentation beats memory.** The whistleblowers who drive successful cases are the ones who show up with specifics — invoices, entry summaries, emails, chat logs that show what the company actually knew. But gather only what you are lawfully entitled to access. Do not hack, do not take privileged legal files, do not steal. Illegally obtained information can disqualify you and expose you personally.
**Timing is real, especially under the False Claims Act.** That law has a “first-to-file” rule: generally, only the first relator to bring a particular set of facts can recover on them. If you wait, someone else — or the company itself, through a voluntary self-disclosure — may get there first and box you out. Several programs also reward or require you to come forward before the company does.
**You are protected from retaliation — but protection is not a force field.** Every one of these programs forbids your employer from firing, demoting, or punishing you for reporting in good faith, and gives you a separate legal claim if they try. That is real and it matters. It is also not a reason to be careless about how and when you move.
**You can often stay anonymous.** The SEC, CFTC, and FinCEN programs let you file anonymously, provided you do it through an attorney. For many insiders that changes the calculus entirely.
**Get a whistleblower lawyer before you file anything.** I don’t say this to sell you on lawyers. I say it because these programs overlap in ways that are genuinely tricky — the DOJ program won’t pay if you were eligible elsewhere; the False Claims Act has that first-to-file trap; the FinCEN rules are brand new and still settling. Which door you knock on, and in what order, can be the difference between a life-changing award and nothing. A good practitioner in this niche will map that for you in a first (usually free and confidential) conversation. I am writing from experience in the field, not as your lawyer, and nothing here is legal advice for your specific situation.
## The bottom line
The uptick is real, the government is paying closer attention than it has in years, and the people best positioned to stop these schemes are the ones already inside the institutions that unknowingly enable them. If that is you, you are not powerless and you are not alone. There is a legal path, there is protection, and — not incidentally — there is a meaningful reward for doing the right thing. The hardest part is the first step: taking what you have seen seriously enough to act on it.
I did. You can too.
Jeffrey Newman, JD, MBA, a former prosecutor, is a whistleblower lawyer whose firm represents physicians and other healthcare providers who become whistleblowers in healthcare fraud cases. The firm also takes cases involving tariff fraud and export control fraud. Whistleblower laws in the U.S. allow individuals with information about export control violations or tariff fraud to report it under the False Claims Act, which, if successful, awards the whistleblower a percentage of the amount collected. The Firm’s website is www.JeffNewmanLaw.com. Attorney Newman can be reached at Jeff@Jeffnewmanlaw.com or at 617-823-3217. For other blogs, see: http://JeffNewmanLaw.com
