Benjamin Gicqueau is a Senior in the UC Berkeley x Sciences Po Paris (Europe-Asia Campus) Dual Degree studying Peace & Conflict and Law.
In a significant development, the United States passed the Anti-Money Laundering (“AML”) Whistleblower Improvement Act in late 2022. This act, hailed by whistleblower advocates as a monumental anti-corruption law, reformed and expanded the U.S. Treasury Department’s AML and Sanctions Whistleblower Program, creating an effective tool for individuals and governments worldwide to combat illicit finance and related criminal activity. In particular, the new AML program holds significant potential for countering Sweden’s criminal networks that have proven links to Iran.1
Poking at Sweden’s New Criminal Web: Transnational Gangs Infiltrate Swedish Healthcare
At a news conference in May 2024, SÄPO (Sweden’s internal security agency) revealed direct ties between the country’s largest gangs—Foxtrot and Rumba—and Iran. Specifically, Iran-born Swedish member of parliament Alireza Akhona alleged that the Iranian Islamic Revolutionary Guard Corps (IRGC) recruited both gangs to smuggle drugs into Sweden. In response, Swedish Prime Minister threatened to deploy the military. The gangs have since begun moving away from visible street corners and instead pierced into the heart of the state’s bureaucracy: the welfare system.2
Foxtrot and Rumba appear to be operating healthcare facilities sponsored by the welfare state. During the pandemic, Foxtrot allegedly purchased vaccination clinics and more recently care centers for “unaccompanied refugee children,” pumping out Swedish healthcare funds as a new source of profit. The businesses act as fronts, mixing government aid with illicit funds to launder money.3 As a victim of welfare fraud perpetrated by individuals connected to global criminal and terrorist networks, Sweden faces a dual threat to state cohesion and security.
Without whistleblowers, the Swedish Financial Police acknowledge that, due to the limited information on emerging forms of welfare fraud, it is “difficult to draw general conclusions about how the proceeds of crime are laundered.” It is suspected that the subsidies, generated by Swedish taxpayers and received on false grounds, pass seamlessly through to private and business accounts. The funds are then layered by more transactions to erase any original trace and then infused into the legitimate economy. Since the proceeds of crime are paid out by public authorities themselves, an alarm for money laundering is rarely sounded.
According to the Swedish Economic Crime Authority, the scheme has proven quite successful. According to 2022 figures, the shift from drug trade of ~$285 million to welfare crimes revenues of ~$950 million marks a trend in greater sophistication in gang activity.4 With direct affiliation to Tehran, Iran’s dirty money may be floating into Northern European markets.
The laundered money in Swedish accounts does not even need to be transferred to the United States to establish jurisdiction. The purchase of American depository receipts (“ADRs”), which allow foreign stocks to be represented 1:1 on U.S. markets, requires public companies to be accountable to American investors and, by extension, the U.S. rule of law. All major Swedish banks offer such ADRs. Thus, money laundering can easily be linked to investor harm in the U.S. As financial crime in Sweden is “continuously growing” at the same time as “organized crime and violence are spreading,” so too is the possibility that the U.S. may intervene and prosecute the conspiracy.
The rise of financial crime corresponds with increased engagement with global crime networks.5 In their evaluation, the National Police Agency introduced welfare fraud as a new priority in their security policy. Given the lack of financial resources and personnel necessary to combat crime, Swedish authorities have become more open to seeking international cooperation to help fight fraud, waste, and abuse.
Piercing Through Transnational Crime: The AML and Sanctions Whistleblower Program
Mobilizing Swedish civil society to participate in reporting organized criminal activity under the U.S.’s robust AML and Sanction Whistleblower Program could effectively dismantle the financial backbone of organized crime networks, such as Foxtrot. Because financial crimes are difficult to detect, enforcement relies heavily on information from insiders. Unfortunately, the Swedish Police Agency confirms that “reporting is almost non-existent and the scope is deemed to be many times greater than the statistics show.”6
Informants unsure of the state’s competence over crime enforcement fear blowing the whistle. Research suggests this is largely due to a lack of protection or incentives that would otherwise encourage a whistleblower to come forward. Sweden and the rest of the European Union member states still lack key whistleblower protections for reporting financial crimes, such as confidentiality, anonymity, and monetary incentives.7 However, Swedish citizens are not without options. Given the transnational nature of the global banking system, money laundering and sanctions violations often fall under U.S. jurisdiction. As a result, foreign nationals may participate in various U.S.-based programs, such as the AML and Sanctions Whistleblower Program, and may receive protection and even financial awards for their information.
Under the AML and Sanctions Whistleblower Program, individuals with original information of money laundering, violations of the Bank Secrecy Act (BSA), or sanctions violations may be eligible for awards up to 30% of monetary sanctions collected if their information leads to a successful enforcement action exceeding $1 million.8 Critically, whistleblowers can report anonymously through the program, which is required to protect their confidentiality.
Other relevant AML laws, such as the Foreign Narcotics Kingpin Designation Act and Sections 5 and 12 of the Trading With the Enemy Act, also fall under the scope of the AML whistleblower program. Swedes and other international whistleblowers can use these laws to help dismantle the complex transnational network of organized crime plaguing Swedish healthcare.
The U.S. government has had major success conducting significant international AML investigations that have led to worldwide multi-billion sanctions. For instance, in 2022, U.S. authorities sanctioned Danske Bank over $2 billion for running a $240 billion money laundering scheme. Despite the absence of a single branch in America, the U.S. nonetheless had jurisdiction to sanction Danske Bank for moving rubles out of Russia, converting them to dollars at its Estonian branch, and then sending the dollars to New York with help from the Bank of America, J.P. Morgan, and Deutsche Bank.
As of May 2024, the amended AML Whistleblower Program has received “270 unique tips” in less than two years that were “highly relevant” to many of the U.S. Treasury’s top priorities.9 This success is a testament to the program’s effectiveness and the U.S. ‘s record for protecting and appropriately rewarding whistleblowers for their efforts motivating others to follow suit and alert American authorities to international financial crime.
The globalized nature of today’s economy makes almost any money laundering fall under the purview of the U.S. government. Furthermore, Iran’s breaching of sanctions for alleged involvement could escalate the case to a top-level priority for the U.S.—mobilizing the Department of Justice (DOJ), the Treasury, the Office of Foreign Assets Control (OFAC), and the Financial Crimes Enforcement Network (FinCEN).Sweden is not an isolated case in Europe. Members of Foxtrot have expanded beyond Scandinavia and were recently caught operating in Brussels and Belgium, in cooperation with Iran.10 To stop the spread of multinational crime, it is paramount that individuals exercise the right to use strong transnational anti-corruption laws. The U.S. AML whistleblower program is a valuable global resource capable of combating money laundering and terrorist financing, which will prevent criminal organizations and networks from growing.
- Swedish gangs as intermediaries for Iran – this is what has happened, SWEDEN HERALD (June 1, 2024), https://swedenherald.com/article/swedish-gangs-as-intermediaries-for-iran-this-is-what-has-happened-c3d7f.
↩︎ - Myndighetsgemensam lägesbild: Organiserad brottslighet 2023, POLISMYNDIGHETEN (June 2, 2023), https://skatteverket.se/download/18.31cd5698188734479d5127/1708608529983/myndighetsgemensam-lagesbild-organiserad-brottslighet-2023.pdf. ↩︎
- INTERVIEW: Welfare fraud ‘a key income’ for some Swedish gangs, THE LOCAL (Oct. 5, 2023), https://www.thelocal.se/20231005/swedish-gang-criminals-branching-out-into-healthcare-sector. ↩︎
- Supra, note 2. ↩︎
- Magdalena Belin, Bedrägerier och penningtvätt, FINANSPOLISEN (Jan. 25, 2022), https://polisen.se/siteassets/dokument/finanspolisen/rapporter/bedragerier-och-penningtvatt.pdf. ↩︎
- Id. ↩︎
- Sweden Whistleblower Law, KOHN, KOHN & COLAPINTO LLP (Dec. 20, 2024), https://kkc.com/sweden-whistleblower-law/. ↩︎
- Joseph Orr, FinCEN’s Anti-Money Laundering and Sanctions Whistleblower Program, KOHN, KOHN & COLAPINTO LLP (January 24, 2025), https://kkc.com/frequently-asked-questions/anti-money-laundering-sanctions-whistleblower-program/. ↩︎
- Geoff Schweller, AML Whistleblower Program has Received Tips “Highly Relevant to Many of Treasury’s Top Priorities”, WHISTLEBLOWER NETWORK NEWS (May 8, 2024), https://whistleblowersblog.org/aml-rewards/aml-whistleblower-program-has-received-tips-highly-relevant-to-many-of-treasurys-top-priorities/.
↩︎ - Iranian External Operations in Europe: The Criminal Connection, THE WASHINGTON INSTITUTE (Oct. 21, 2024), https://www.washingtoninstitute.org/policy-analysis/iranian-external-operations-europe-criminal-connection. ↩︎
