Bank of America has been fined $1.2bn for failing to detect and report billions of dollars in suspicious transactions linked to potential money laundering and other illegal activities, the US Treasury Department has announced.
According to the BBC, the Treasury said the banking giant failed to report more than $5bn in suspicious activity to the government, including $1bn in transactions that posed national security and illicit finance risks.
The reported failures included transactions potentially linked to Chinese money laundering networks and trade-based money laundering activities with significant connections to the southwestern US border.
Bank of America said it was committed to addressing the concerns raised by regulators.
“Our team is far along with and committed to completing the work required to address the issues raised by our regulators,” the bank told the BBC.
The announcement came less than 24 hours before the bank was scheduled to release its quarterly earnings on Wednesday.
In an emailed statement, Bank of America said its third-quarter results would include a non-tax-deductible charge of $1.2bn, reducing net income by approximately 17 cents per share.
The bank added that it had already committed substantial personnel and resources to ongoing efforts to address the regulatory concerns, with the associated costs reflected in its current expenses.
The Treasury described the penalty as the third-largest ever imposed by the department.
Treasury Secretary Scott Bessent said the bank’s failure to meet its anti-money laundering and sanctions obligations exposed the wider US financial system to significant risks.
The department also criticised the bank for relying excessively on information from external parties, including law enforcement agencies and other financial institutions, rather than using its own internal controls to identify suspicious transactions.
According to the Treasury, this approach effectively outsourced a substantial part of the bank’s responsibility to proactively detect and report potentially illegal financial activity.
As part of the settlement, Bank of America admitted that it had “willfully violated” the Bank Secrecy Act by failing to maintain a compliant anti-money laundering programme, conduct required due diligence on foreign correspondent accounts and file suspicious activity reports, the Treasury said.
The $1.2bn penalty included sanctions imposed by the Office of the Comptroller of the Currency (OCC) and the Office of Foreign Assets Control (OFAC).
The OCC imposed a $750m fine, the largest penalty in the agency’s history.
Meanwhile, OFAC said its settlement related to 475 apparent violations of sanctions programmes covering Russia, Iran, narcotics and global terrorism.
OFAC said the $11.6m settlement reflected its determination that the apparent violations were non-egregious.
The penalties underscore the regulatory consequences financial institutions can face when they fail to maintain effective controls against money laundering, suspicious transactions and sanctions violations.
