Bank of America has been hit with a $1.2bn fine by the US Treasury Department for failing to spot potential money laundering and illegal activity. The bank did not report over $5bn in suspicious transactions to the government, with $1bn of that amount posing national security and illicit finance risks, the Treasury said on Tuesday. The missed red flags included transactions potentially connected to Chinese money laundering networks and trade-based laundering linked to the southwest border.
The fine represents the third-largest penalty the Treasury has ever imposed. The Office of the Comptroller of the Currency imposed $750m of the total, marking its biggest-ever penalty, while the Office of Foreign Assets Control added $11.6m, linked to 475 apparent violations of sanctions programmes on Russia, Iran, narcotics and global terrorism.
Bank of America admitted it willfully violated the Bank Secrecy Act by failing to maintain proper anti-money laundering controls and filing requirements. The Treasury said the bank overly relied on inquiries from law enforcement and other financial institutions rather than its own internal monitoring systems, effectively outsourcing detection responsibilities to third parties.
The bank said it would record a non-tax-deductible $1.2bn charge against third-quarter results, reducing net income by approximately 17 cents per share. Bank of America told the BBC it was committed to completing remediation work and had already dedicated substantial personnel and resources to addressing the issues raised by regulators.