The U.S. Department of the Treasury imposed more than $1.21 billion in penalties on Bank of America, the country’s second-largest bank, for breaches of anti-money-laundering and sanctions regulations.
According to the Financial Crimes Enforcement Network (FinCEN), the Bank faced penalties for failing to adequately address or report major national security risks, including money-laundering networks associated with China and illicit financial transactions along the U.S. southwest border. To date, these fines are the third-largest amount ever issued by the department.
BoA will pay $750 million to the U.S. Office of the Comptroller of the Currency
The $1.2 billion penalty includes a historic $750 million payout to the U.S. Office of the Comptroller of the Currency (OCC), marking the agency’s largest fine to date. Additionally, the Office of Foreign Assets Control (OFAC) secured an $11.6 million settlement over the bank’s apparent violations of sanctions targeting Iran, Russia, narcotics, and international terrorism.
In its press release, the OCC said it found that the institution’s severely flawed tracking system allowed trillions of dollars to slip through without proper oversight. A flaw that forced the bank to file late red-flag reports on billions of dollars, much of it tied to suspected money laundering.
Furthermore, it claimed the bank was aware for years that potentially illicit transactions were not being escalated for investigation, but failed to remedy this critical compliance failure. Additionally, it noted that the bank’s compliance leadership and staff were underqualified to manage a robust anti-money laundering program.
A lack of targeted training on how to properly investigate and report suspicious transactions ultimately caused the bank to submit flawed and overdue compliance reports to regulators, the agency said.
Suspicious activity reports are an important part of the U.S. financial system’s efforts to combat illicit finance. Banks submit these reports to FinCEN when transactions raise concerns about possible illegal activity.
Regulators and law enforcement agencies can use the information to identify suspicious financial networks, investigate potential crimes, and trace the movement of funds. Delayed or incomplete reports can make it harder for authorities to detect patterns across multiple transactions or institutions, particularly when suspected activity involves cross-border transfers and complex money-laundering networks.
As noted by the Treasury, Bank of America has admitted to violating the 1970 Bank Secrecy Act, which requires banks to help authorities prevent money laundering. The bank contended, “Financial crime compliance is serious, and we are responsible for getting it right. We worked with regulators to reach these penalty resolutions stemming from violations cited in the previously reported 2024 (Comptroller of the Currency) Consent Order and FinCEN’s investigation.”
The Bank Secrecy Act requires financial institutions to maintain effective anti-money laundering programs, keep appropriate transaction records, and report suspicious financial activity to authorities. Such measures help law enforcement identify money laundering, terrorist financing, and other financial crimes.
Financial institutions that do not detect or report suspicious transactions can leave gaps that criminals exploit to move illicit funds through the financial system. The Bank of America case demonstrates the importance of effective monitoring systems and timely reporting in helping regulators identify financial risks.
It added that so far, they’ve spent billions of dollars on technology and hired thousands of people to stop financial crime. Nonetheless, it acknowledged there’s still more to be done and is working to resolve the remaining issues flagged by regulators.
Also, regarding the fines, US Treasury Secretary Scott Bessent noted that the department’s action shows that even the country’s biggest banks are not exempt from legal accountability.
Binance faced a $4 billion penalty
Only two fines in Treasury history top this latest one: the $4 billion Binance penalty in 2023 and TD Bank’s $3 billion settlement in 2024.
As reported by Cryptopolitan, in 2023, Changpeng Zhao stepped down from his role as chief executive as Binance acknowledged its failures. The crypto exchange admitted it violated the Bank Secrecy Act and ignored sanctions programs by failing to implement proper systems to track suspicious transactions.
At the time, the then U.S. Attorney General Merrick Garland even sharply criticized the exchange, emphasizing that employing novel technology to bypass legal frameworks does not make a firm a market disruptor, but rather a criminal.
Binance was subjected to a $4 billion penalty and a five-year monitoring period. Later, Binance founder Changpeng Zhao was sentenced to four months in prison for allowing his exchange to become a haven for terror financing, drug trafficking, and child abuse material.
In a similar vein, Canada-based TD Bank agreed to a $3 billion penalty after structural deficiencies enabled systemic money laundering over a multi-year period. “TD Bank created an environment that allowed financial crime to flourish. By making its services convenient for criminals, it became one,” Garland had noted.
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