Bank of America Faces $1.21 Billion Fine Over Chinese Money Laundering and Sanctions Violations Involving Russia and Iran
Bank of America has been hit with a $1.21 billion fine by U.S. regulators for failing to detect and report billions in suspicious transactions. The U.S. Treasury Department stated that the bank did not report over $5 billion in suspicious activity, including $1 billion linked to national security risks and potential money laundering. The unreported transactions involved networks in China and trade-based laundering associated with the U.S. southwest border.
The Treasury Department criticized the bank for prioritizing revenue over compliance, stating it relied too heavily on inquiries from law enforcement and other financial institutions instead of its internal controls. This approach effectively outsourced a significant portion of its responsibility to detect and report suspicious activities.
Violated Bank Secrecy Act
As part of the settlement, Bank of America acknowledged that it “willfully violated” the Bank Secrecy Act. The bank failed to maintain a compliant anti-money laundering program, conduct necessary due diligence on foreign correspondent accounts, and file required suspicious activity reports. The $1.21 billion penalty includes a $750 million civil fine from the Office of the Comptroller of the Currency (OCC), marking the largest fine in the regulator’s history. The OCC noted that the bank had not addressed deficiencies in its anti-money laundering programs identified in a 2024 cease-and-desist order.
Additionally, Bank of America agreed to pay $11.6 million to the Office of Foreign Assets Control (OFAC) for 475 apparent violations of sanctions targeting Russia, Iran, narcotics, and global terrorism. OFAC characterized these violations as “non-egregious.” Under the terms of the settlement, the bank is required to hire an independent third party to review past transactions, identify any suspicious activity it failed to detect, and report those transactions to the Financial Crimes Enforcement Network (FinCEN).
Bank of America stated it has invested billions in technology and dedicated thousands of employees to combat financial crime. The bank is committed to fulfilling the requirements set by regulators and has already allocated substantial resources to remediation efforts. The bank’s third-quarter results, set to be released on Wednesday, will reflect a non-tax-deductible charge of $1.2 billion, which is expected to reduce net income by approximately 17 cents per share. Following the announcement, Bank of America shares fell 2.7% in after-hours trading after a 1.1% decline during regular trading hours.
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