Bank of America Hit with Over $1.2 Billion in Fines for Anti-Money Laundering and Sanctions Violations

The U.S. Treasury Department has levied penalties exceeding $1.21 billion against Bank of America, the nation's second-largest bank, for breaches of anti-money laundering and sanctions regulations. This announcement on Tuesday marks the third-largest penalty ever imposed by the department, according to a U.S. Treasury statement. "When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risks," stated U.S. Treasury Secretary Scott Bessent. He emphasized that these "actions send a clear message that even the biggest financial institutions are not above the law."

Enforcement actions

The Financial Crimes Enforcement Network (FinCEN), under the Treasury Department, imposed a $1.2 billion penalty due to the bank's failure to mitigate and report "priority national security risks, including Chinese Money Laundering Networks and illicit finance along the southwest border." These identified deficiencies involved issues with the bank's systems for identifying and reporting suspicious transactions, as well as its customer due diligence processes. The Treasury statement noted that "the Bank effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations." Furthermore, "Bank of America failed to timely report to FinCEN over $5 billion dollars in suspicious transactions," the Treasury reported.

Separately, the Office of the Comptroller of the Currency (OCC) issued its largest-ever fine, $750 million, for the bank's inadequate anti-money laundering compliance program. FinCEN's $1.2 billion penalty accounts for the OCC fine. The Office of Foreign Assets Control (OFAC) also finalized an $11.6 million settlement for apparent violations of multiple sanctions programs, including those related to Iran, Russia, narcotics, and global terrorism. Bank of America has agreed to resolve 475 apparent violations of various sanctions programs, and this settlement includes "significant compliance commitments regarding training, testing and audit, and future communication and cooperation with OFAC." The Treasury reiterated in its statement that these actions "underscore the importance of effectively complying" with U.S. anti-money laundering and sanctions requirements.

In response, Bank of America stated, "Financial crime compliance is serious, and we are responsible for getting it right." The bank added, "We have invested billions of dollars in technology and dedicated thousands of employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised by our regulators."