Bank of America has been fined a total of $1.2 billion dollars by the Office of the Comptroller of the Currency (OCC) and the Financial Crimes Enforcement Network (FinCEN) after admitting failures of its Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance program resulting in over $5 billion in suspicious activity.
The $750 million fine from the OCC is the largest civil money penalty that the bureau has ever issued.
FinCEN is responsible for the remainder of the fine and credits the $750 million against its total penalty of $1.2 billion.
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The FinCEN order details how Bank of America “willfully failed to implement and maintain adequate internal controls for BSA compliance” which resulted in missing or delayed reports for “over $5 billion of suspicious activity, with roughly $1 billion of this activity implicating national security-related and other priority illicit finance risks, including suspicious transactions indicative of Chinese Money Laundering Networks.”
This Chinese Money Laundering Network activity included “high volumes of back-to-back credit card purchases at major retailers and shipping companies inconsistent with customer profiles,” and “regular, large-value ACH and bill pay transactions to pay off balances for credit cards issued by third-party financial institutions.
These included “cards in the name of third-party individuals for which there was no apparent commercial purpose; large wire transfers to counterparties in China with generic descriptions (e.g., “for goods”) and no discernible business rationale; and substantial, repeated transfers to counterparties with no web presence operating from residential addresses, demonstrating an apparent lack of legitimate commercial purpose.”
Additionally, FinCEN found that the bank’s due diligence on correspondent accounts held by its own foreign branches and affiliates fell short.
Some regulatory questionnaires “were completed by the bank on behalf of all its foreign branches and affiliates, and others were completed for specific foreign branches and affiliates.”
This record-breaking OCC fine follows its recent $350 million fine levied against American Express.
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