Bank of America has been fined $1.2bn (£910m) for failing to detect potential money laundering and other criminality, the US Treasury Department said on Tuesday.
The banking giant failed to report over $5bn in suspicious exercise to the authorities, $1bn of which posed national security and illicit finance dangers, the Treasury said.
Those failures included not flagging transactions that presumably concerned Chinese money laundering networks or trade-based laundering “with a substantial nexus to the southwest border”, according to the Treasury.
“Our team is far along with and committed to completing the work required to address the issues raised by our regulators,” Bank of America informed the BBC.
The announcement came less 24 hours before Bank of America was due to announce its quarterly earnings on Wednesday morning.
“Our third-quarter results will include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share,” the bank said in an emailed assertion.
“We have already dedicated substantial personnel and resources to our ongoing remediation efforts, and those costs are in the current expense base,” it added.
In saying the tremendous, the third-largest the division has ever imposed, Treasury Secretary Scott Bessent said: “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 US financial system to significant illicit finance risks.”
The Treasury said the bank overly relied on inquiries from outside events like law enforcement and other financial establishments instead of its own inner controls.
This meant that it “effectively outsourced to third parties a substantial portion of its proactive detection and reporting obligations,” the division said.
As half of the settlement, Bank of America admitted that it “willfully violated” the Bank Secrecy Act by failing to preserve a compliant anti-money laundering programme, conduct required due diligence on overseas correspondent accounts and file suspicious exercise reports, the Treasury said.
The $1.2bn tremendous included penalties imposed by the Office of the Comptroller of the Currency (OCC) and the Office of Foreign Assets Control (OFAC).
The OCC’s $750m tremendous marked the largest penalty it has ever levied.
OFAC said its settlement with the bank was tied to 475 obvious violations of sanctions programmes including those on Russia and Iran, narcotics, and world terrorism.
The settlement quantity of $11.6m mirrored the dedication that Bank of America’s obvious violations were “non-egregious”, OFAC said.
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