The U.S. Department of the Treasury imposed more than $1.21 billion in penalties against Bank of America for violations of anti-money laundering and sanctions laws.
This is the third-largest penalty in Treasury history and the largest in the Office of the Comptroller of the Currency (OCC) history.
The Treasury’s Financial Crimes Enforcement Network (FinCEN) assessed a $1.2 billion penalty for the bank’s failure to mitigate and report priority national security risks, including Chinese money laundering networks and illicit finance along the southwest border.
The OCC assessed a $750 million civil money penalty for the bank’s deficient and ineffective BSA/AML (anti-money laundering) compliance program.
Further, the Office of Foreign Assets Control (OFAC) announced an $11.6 million settlement agreement with the bank over apparent violations of numerous sanctions programs, including on Iran, Russia, narcotics, and global terrorism.
“Financial institutions are on the front lines of protecting our economic and national security,” Treasury Secretary Scott Bessent said. “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. Today’s actions send a clear message that even the biggest financial institutions are not above the law.”
As part of its resolution with FinCEN, Bank of America admitted that it violated the BSA. Specifically, it failed to implement and maintain an AML program that met the minimum requirements of the BSA and FinCEN’s implementing regulations. The bank also failed to conduct due diligence for correspondent accounts for foreign financial institutions, and file suspicious activity reports (SARs).
As these issues arose, according to the Treasury, Bank of America prioritized its revenues and minimized the impact on its required compliance resources. The bank effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations. It also allowed suspicious activity to accumulate uninvestigated for extended periods without investigation, resulting in late reporting of limited utility to law enforcement.
Further, Bank of America failed to take meaningful action even in the face of testing that highlighted significant problems.
As a result of these failures, Bank of America failed to timely report to FinCEN over $5 billion dollars in suspicious transactions, with over $1 billion of this activity implicating national security-related and other priority illicit finance risks. This includes suspicious transactions indicative of Chinese money laundering networks, fraud, and potential trade-based money laundering with a substantial nexus to the southwest border.
The order requires Bank of America to work with a third party to complete a lookback to identify and report to FinCEN suspicious transactions that went undetected. Bank of America also must undergo an independent review of the effectiveness of its suspicious activity monitoring, CDD, and foreign correspondent account due diligence programs, as well as its data governance framework used in its AML program. The independent reviews are tailored to the violations and will evaluate the effectiveness of Bank of America’s AML program in addressing priority risks.