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The Treasury Department announced approximately $1.21 billion in combined penalties against Bank of America over longstanding anti-money laundering failures and violations of U.S. sanctions. The action follows findings that serious compliance deficiencies persisted despite the bank’s awareness of the problems.

Regulators determined that Bank of America failed to investigate trillions of dollars in potentially suspicious transactions adequately. The failures included delayed reporting, weaknesses in transaction monitoring and gaps that allowed potentially illicit activity to escape detection.

The penalties include the largest ever imposed by the Office of the Comptroller of the Currency and the third largest in the history of the Financial Crimes Enforcement Network. The enforcement action places substantial financial and operational pressure on the nation’s second largest bank.

FinCEN assessed a $1.2 billion penalty, including credit for a $750 million civil penalty imposed by the OCC. A separate $11.6 million settlement with the Office of Foreign Assets Control brought the combined amount to approximately $1.21 billion.

Bank of America said the penalties would produce a $1.2 billion charge that is not deductible for tax purposes in its third quarter financial results. The bank expects the charge to reduce net income by approximately 17 cents per share.

A Bank of America spokesperson acknowledged the violations and said the company has invested billions of dollars in technology. The bank has also assigned thousands of employees to efforts aimed at combating financial crime.

The company said it worked with regulators to resolve the penalties and has made substantial progress in correcting the identified deficiencies. It also committed to completing the remaining improvements and continuing to assist federal and local law enforcement with financial crime investigations.

According to Treasury, Bank of America failed to report more than $5 billion in suspicious transactions on time. That total included more than $1 billion in activity involving national security risks, including Chinese money laundering networks, fraud and potential money laundering involving trade connected to the southwest border.

Under its settlement with FinCEN, Bank of America admitted that it willfully violated the Bank Secrecy Act. The bank failed to maintain an adequate anti-money laundering program, perform required due diligence on certain foreign bank accounts and file suspicious activity reports.

The OCC found that Bank of America’s transaction monitoring system did not properly monitor trillions of dollars in transactions. That failure produced large numbers of late suspicious activity reports covering billions of dollars, with many transactions displaying indicators of possible money laundering.

Regulators also concluded that the bank knew for years that it was failing to refer potentially suspicious transactions for investigation. Despite that knowledge, the identified problems were not corrected.

The OCC first identified significant deficiencies in 2023. It issued an order to cease and desist in December 2024 that required Bank of America to strengthen its anti-money laundering program.

Even after that order, regulators found that widespread breakdowns continued across the bank’s internal controls. Those weaknesses included gaps that allowed potential money laundering transactions involving trade to remain undetected.

Comptroller of the Currency Jonathan V. Gould criticized Bank of America for failing to resolve the problems despite repeated warnings. The criticism accompanied an enforcement package that requires deeper scrutiny of transactions the bank’s systems previously missed.

The separate OFAC settlement covered 475 apparent violations of U.S. sanctions programs. Those programs targeted Iran, Russia, Belarus, Burma and Somalia, along with narcotics trafficking and global terrorism.

The violations included payments processed through sanctioned banks and transactions conducted by certain sanctioned individuals. Regulators also found that Bank of America failed to update federal sanctions watchlists promptly.

Bank of America must now work with an independent third party to review suspicious transactions that previously went undetected. It will also face additional reviews of its anti-money laundering controls as regulators assess the required corrective work.

The bank agreed to further sanctions compliance commitments covering employee training, testing and audits. It must also continue cooperating with federal regulators as it works through the consequences of one of the most substantial compliance enforcement actions described by the agencies.

DISCLAIMER: GoldInvestors.news is not a registered investment, legal or tax advisor or broker/dealer. All investment/financial opinions expressed by GoldInvestors.news are from the personal research and experience of the owner of the site and are intended as educational material. Although best efforts are made to ensure that all information is accurate and up to date, occasionally unintended errors and misprints may occur.