The US Treasury Department said on Tuesday it was imposing penalties totalling $1.2 billion on Bank of America for alleged violations of anti-money laundering and sanctions laws.
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The enforcement action ranks as the third-largest penalty in the department’s history, behind settlements with cryptocurrency exchange Binance ($4billion) and TD Bank ($3 billion).
“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 US financial system to significant illicit finance risks,” Treasury Secretary Scott Bessent said.
“Today's actions send a clear message that even the biggest financial institutions are not above the law.”
According to Reuters, Bank of America paid an $11.6 million fine to the Office of Foreign Assets Control for more than 400 apparent violations of sanctions programmes targeting countries including Russia and Iran. The Treasury said the bank mistakenly processed millions of dollars in prohibited payments.
The Treasury’s Financial Crimes Enforcement Network (FinCEN) imposed the $1.2 billion penalty over the bank’s alleged failure to mitigate and report national security risks, including those involving Chinese money-laundering networks and illicit finance along the US southwest border.
Under a consent order, the bank must hire an independent third party to review past transactions, identify suspicious activity it failed to detect and report it to FinCEN.
The penalty includes $750 million payable to the Office of the Comptroller of the Currency, the largest fine ever imposed by the federal bank regulator.
The Treasury said Bank of America admitted to wilfully violating the 1970 Bank Secrecy Act, which requires banks to help the government detect and prevent money laundering.
“Financial crime compliance is serious, and we are responsible for getting it right,” the bank said, adding that it had worked with regulators to resolve penalties arising from violations cited in a previously reported 2024 consent order. It said it had invested billions of dollars in technology and dedicated thousands of employees to combating financial crime.
The earlier penalties against Binance and TD Bank were part of the Biden administration’s efforts to strengthen anti-money laundering enforcement and compliance in the emerging virtual currency industry.
Binance founder and former CEO Changpeng Zhao was later sentenced to four months in prison over charges related to the platform’s failure to prevent criminals from using it to move money linked to child sexual abuse, drug trafficking and terrorism.
(With inputs from Reuters and AP via PTI)
