Bank of America fined US$1.21 billion as US flags suspected Chinese money laundering

Bank of America has been hit with a historic $1.2 billion fine for failing to report suspicious financial activity, according to the U.S. Department of the Treasury. The violation of anti-money-laundering and sanction laws came to light on Tuesday, October 13, when the Treasury announced the hefty penalty. The fine is the third largest in the Department's history, surpassed only by fines given to Binance and TD Bank in 2023.

The total amount includes a $750 million penalty from the Office of the Comptroller of the Currency (OCC) for an ineffective anti-money laundering program, as well as an $11.6 million settlement with the Office of Foreign Assets Control (OFAC). The Treasury Department stated that the $1.2 billion fine is a result of Bank of America's failure to report over $5 billion in suspicious activity to the Financial Crimes Enforcement Network (FinCEN).

Of this amount, $1 billion was linked to national security risks, including transactions connected to Chinese money laundering networks, fraud, and potential trade-based money laundering near the southwest border. Bank of America's spokesperson acknowledged the company's commitment to addressing financial crime compliance issues, stating that they have invested billions of dollars in combating financial crime and are "responsible for getting it right."

Despite the fines, the company reported $30.12 billion in revenue for the third quarter, which fell short of Wall Street's expectations of $30.69 billion. The company disclosed that they would incur a $1.2 billion non-tax-deductible charge, impacting net income by approximately 17 cents per share.