Bank of America Fined $1.2 Billion over Alleged Money Laundering Violations

Bank of America has been accused of violating anti-money laundering regulations and has been fined $1.2 billion. The move signals that the US government considers no financial institution to be above the law. The US Treasury Department’s action is being viewed as a stern warning to the entire banking sector. Treasury Secretary Scott Bessent has taken a tough stance on the matter, saying that when major banks fail to fulfil their responsibilities, the consequences extend far beyond those institutions. Such failures expose the entire US financial system to the risks of illicit financial activity.

The bank is accused of deliberately violating the Bank Secrecy Act of 1970, a law designed to help the government combat money laundering. The bank has also acknowledged its own wrongdoing. According to the Treasury Department, the case goes beyond ordinary money laundering, involving the failure to address serious national security risks. These include Chinese money laundering network and the concealment of information related to illicit financial activities along the southwestern border of the United States.

In addition, the Office of Foreign Assets Control (OFAC) has reached an agreement with the bank involving a payment of $11.6 million. The penalty relates to violations of sanctions involving Iran, Russia, drug trafficking and international terrorism. Following the major enforcement action, the bank also issued a statement saying it fully understands its responsibilities in preventing financial crime. It said it has invested billions of dollars in technology to address its shortcomings and has assigned thousands of employees specifically to this work.

Of the total penalty, $750 million will be paid directly to the Office of the Comptroller of the Currency (OCC). This is the largest fine in the history of the federal banking regulatory agency. It is also the third-largest penalty in the history of the US Treasury Department. Previously, in 2023, Finance, the world’s largest crypto currency exchange, was fined approximately $4 billion. Its founder, Changpeng Zhao, was also sentenced to prison after the platform was used for activities involving drugs and child sexual exploitation, among other offences. Canada’s TD Bank has also faced a penalty of approximately $3 billion. The Biden administration repeatedly pursued similar enforcement actions to prevent financial institutions from exploiting weaknesses in the system.