US fines Bank of America US$1.2b for anti-money laundering violations

The US Treasury Department has imposed a penalty of more than US$1.2 billion on Bank of America for violating anti-money laundering and sanctions laws, according to a report on Oct 13. The financial institution failed to report over US$5 billion in suspicious transactions, some of which involved national security risks and were linked to Chinese money laundering networks and illicit finance around the southwestern US border.

The Treasury's Financial Crimes Enforcement Network assessed a civil penalty of US$750 million, while the Office of the Comptroller of the Currency and the Office of Foreign Assets Control separately imposed a US$11.6 million settlement for violations of numerous sanctions programs, including those against Iran, Russia, narcotics, and global terrorism.

US Treasury Secretary Scott Bessent emphasized that the bank's failure to comply with anti-money laundering and sanctions obligations poses risks to the entire US financial system. Bank of America's spokesperson confirmed that the company's third-quarter earnings will include a US$1.2 billion charge, impacting net income by around 17 cents per share.

The bank has agreed to a consent order requiring it to work with a third party to identify and report undetected suspicious transactions, undergo an independent review of its suspicious activity monitoring programs, and address other forms of due diligence. The bank faces a December 2024 cease-and-desist order, highlighting its ongoing and egregious violations of the Bank Secrecy Act.