Bank of America fined $1.2B by US Treasury over money laundering violations, Treasury Secretary warns of consequences: ‘Willfully violated’

A major United States bank has been told it fell short on stopping dirty money. Federal officials say the gaps touched on national security. The bank now faces a hefty penalty.

According to The Associated Press, Treasury said it is fining Bank of America $1.2 billion. The penalty covers alleged breaches of anti-money laundering and sanctions laws. It is the third-largest in the department’s history. Bank of America is the second-biggest bank in the country. Treasury Secretary Scott Bessent said that size raises the stakes.

“When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risks,” Bessent said in a statement. He added that the action sends a message. “Today’s actions send a clear message that even the biggest financial institutions are not above the law.”

Treasury flags national security risks

Treasury’s Financial Crimes Enforcement Network, known as FinCEN, set the penalty. It pointed to the bank’s “failure to mitigate and report priority national security risks, including Chinese Money Laundering Networks and illicit finance along the southwest border.”

Fraud and illicit money can touch a bank in many ways. A CBC journalist once got pulled into a sting operation at his own bank, which shows how hard these cases can be to spot from the inside. Of the total, $750 million will go to the Office of the Comptroller of the Currency. Treasury says that is the largest fine the agency has ever imposed.

Bank of America also reached a separate $11.6 million settlement with Treasury’s Office of Foreign Assets Control. That office cited “apparent violations of numerous sanctions programs, including on Iran, Russia, narcotics, and global terrorism.” Treasury said the bank “admits that it willfully violated” the Bank Secrecy Act. Congress passed the law in 1970. It requires banks to help the government detect and prevent money laundering.

Bank of America said it worked with regulators to resolve the penalties and remained committed to addressing the issues they raised. “Financial crime compliance is serious, and we are responsible for getting it right,” it said. Bank of America tied the penalties to a 2024 consent order from the Comptroller of the Currency and to the FinCEN investigation. It also described the work it has done since then.

“We have invested billions of dollars in technology and dedicated thousands of employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised by our regulators.”

The fine lands behind two larger Treasury actions. Binance paid roughly $4 billion in 2023, and Canada-based TD Bank paid about $3 billion the following year. Both came under the Biden administration, which put heavy focus on anti-money laundering rules. Binance founder Changpeng Zhao was later sentenced to four months in prison.

Bank of America has faced scrutiny from customers as well. A Massachusetts man said the bank froze the funds he planned to use for a home down payment while he waited for a check to clear. That case is separate from the Treasury action, and the report does not connect the two. The bank said it was far along in addressing the issues raised by regulators and remained committed to completing the work.