Bank of America Hit with $1.2 Billion Fine Over Anti-Money Laundering Lapses

By Associated Press

The U.S. Department of the Treasury announced Tuesday that it has levied a $1.2 billion fine against Bank of America for significant failures in its anti-money laundering (AML) compliance framework.

“When a financial institution of this magnitude falls short in meeting its anti-money laundering and sanctions responsibilities, the repercussions reach well beyond the institution itself, undermining the stability of the entire U.S. financial ecosystem,” said U.S. Treasury Secretary Scott Bessent in an official statement. “This action underscores that no entity—regardless of its size or influence—is exempt from regulatory scrutiny.”

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In addition to the primary penalty, the Treasury disclosed that Bank of America agreed to an extra $11.6 million settlement with the Office of Foreign Assets Control (OFAC), addressing what officials described as “apparent violations” across multiple sanctions regimes—including those related to Iran, Russia, narcotics trafficking, and global terrorism.

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TheFinancial Crimes Enforcement Network (FinCEN) imposed the $1.2 billion penalty after determining that the second-largest bank in the United States did not adequately safeguard against or report on critical threats to national security, particularly concerning Chinese money laundering syndicates and illicit financial flows along the U.S.–Mexico border.

According to the Treasury, Bank of America failed to properly file reports on over $5 billion in suspicious transactions, including more than $1 billion tied directly to elevated financial crime and national security concerns.

A portion of the total penalty includes a separate $750 million fine from the Office of the Comptroller of the Currency (OCC), marking one of the largest penalties ever issued by the federal banking regulator.

Treasury officials confirmed that Bank of America acknowledged willfully violating the Bank Secrecy Act of 1970, a cornerstone piece of legislation mandating financial institutions’ participation in detecting and deterring money laundering activities.

“Compliance with financial crime prevention standards is non-negotiable, and accountability must reflect the severity of such violations,” Treasury emphasized in its public communication.

In response, Bank of America issued a statement accepting responsibility for past shortcomings while outlining steps taken toward remediation. “We recognize our obligation to uphold rigorous compliance measures and are actively working to resolve deficiencies identified through prior regulatory reviews, including those noted in the 2024 OCC Consent Order and ongoing FinCEN investigations,” the company said.

The bank further emphasized its commitment by citing substantial investments in advanced technology systems and personnel expansion aimed at strengthening detection capabilities and reinforcing internal controls.

This regulatory crackdown ranks as the third-largest penalty ever imposed by the Treasury Department, trailing only two major cryptocurrency-related settlements. In 2023, Binance—the world’s leading digital asset exchange—agreed to pay approximately $4 billion to settle allegations involving anti-money laundering lapses. A year later, Canadian-based Toronto-Dominion (TD) Bank settled similar charges for nearly $3 billion.

These coordinated efforts align with wider policy initiatives under the Biden administration designed to fortify AML oversight across traditional finance and emerging sectors alike, especially within the rapidly evolving cryptocurrency landscape.

As part of these campaigns, Binance founder Changpeng Zhao received a four-month prison sentence in 2024 after pleading guilty to charges related to facilitating anonymous transfers linked to serious crimes such as child exploitation, drug distribution, and terrorist financing.

In a notable development last October, former President Donald J. Trump granted Zhao a full pardon, bringing renewed attention to the intersection of executive authority and cybercrime enforcement.

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