Treasury hit Bank of America with more than $1.2 billion in penalties for willfully failing to report over $5 billion in suspicious transactions tied to Chinese money laundering networks and southwest border illicit finance.
Treasury Secretary Scott Bessent announced more than $1.21 billion in penalties against Bank of America on Tuesday, concluding that the country's second-largest bank willfully failed to guard the financial system against criminal money tied to Chinese laundering networks and drug trafficking along the southwest border. The Financial Crimes Enforcement Network (FinCEN) assessed a $1.2 billion penalty, the third-largest in the agency's history, while the Office of the Comptroller of the Currency (OCC) imposed a $750 million civil money penalty, the largest the regulator has ever handed down. The Office of Foreign Assets Control (OFAC) added an $11.6 million settlement over apparent violations of sanctions programs covering Iran, Russia, narcotics and global terrorism.
The combined actions amount to one of the most significant enforcement strikes against a major American bank in years, and they land squarely on the national security front where the Trump administration has pledged to squeeze illicit finance. Bank of America does not dispute the core findings. As part of its resolution with FinCEN, the bank admits it willfully violated the Bank Secrecy Act and failed to maintain an anti-money-laundering program that met even the minimum requirements of federal law.
The Bank Secrecy Act is the spine of America's financial defense. It requires banks to build safeguards against money laundering, verify who their customers are, and file Suspicious Activity Reports when transactions point to crime. When a bank that size lets that system decay, the fallout is not a clerical matter -- it is cash moving for cartels, foreign networks and sanctioned regimes with a mainstream bank as the unwitting highway.
At the center of the case is a damning operational picture. Federal investigators found that as compliance problems mounted, Bank of America prioritized revenue and minimized the impact on the resources devoted to its legal obligations. Rather than leaning on its own automated controls, the bank leaned on outside prompts -- law enforcement inquiries, referrals from other financial institutions and similar interventions -- to spot potentially suspicious transactions.
In effect, regulators concluded, the bank outsourced a substantial share of its own proactive detection and reporting duties to third parties. Suspicious activity piled up uninvestigated for extended periods, producing late reports of little practical use to investigators. Bank of America stayed on that course even after its own testing flagged serious problems, according to the findings.
Customer due diligence fared no better. The bank failed to account for customers who relied heavily on payments from unknown third parties, and it did not meaningfully respond to mounting red flags -- including possible narcotics trafficking proceeds -- even after compliance staff escalated concerns about trade-based money laundering and fraud.
The cost of those failures is measured in the transactions that never triggered a timely report. Bank of America failed to flag more than $5 billion in suspicious transactions to FinCEN. More than $1 billion of that activity implicated national security and other priority risks, including transactions indicative of Chinese money laundering networks, fraud and potential trade-based money laundering with a substantial nexus to the southwest border.
That border tie places the case inside a widening enforcement campaign against the cartels and networks that move illicit cash. Treasury has moved aggressively against those pipelines, including its earlier sanctions on the Sinaloa Cartel's Los Mayos network, and the Bank of America findings show how much criminal money can slip through a compliant-looking institution once internal controls break down.
It is a pattern the administration has treated as a front-line security issue rather than a back-office annoyance, arguing that money laundering and sanctions evasion are the same fight seen from two ends of the same wire.
Bessent framed the penalties as a matter of economic and national security, not paperwork. "Financial institutions are on the front lines of protecting our economic and national security," he said in announcing the actions. "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."
He closed with a message aimed at every large institution watching the case: "Today's actions send a clear message that even the biggest financial institutions are not above the law."
The sums put the Bank of America action in rare company. Only the penalties against cryptocurrency exchange Binance in 2023 and TD Bank in 2024 exceeded the FinCEN total, making this the third-largest enforcement action in the agency's history. The OCC's $750 million penalty, credited against the FinCEN figure rather than stacked on top of it, is the largest in that regulator's history.
The resolution does not end with a check. Under a consent order, Bank of America must work with a third party to complete a lookback aimed at identifying and reporting the suspicious transactions its controls missed. The bank must also submit to independent reviews of the effectiveness of its suspicious activity monitoring, customer due diligence and foreign correspondent account due diligence programs, along with its data governance as it feeds the bank's anti-money-laundering systems.
Treasury paired the announcement with a broader signal to the financial industry: anti-money-laundering and sanctions compliance can no longer run as separate shops. Given the converging nature of those risks, regulators want institutions to build programs that reinforce each other rather than leave seams that criminal networks can exploit.
Bank of America said it has been investing in its controls, but the government's findings will hang over the franchise until the lookback and the independent reviews are complete. The bigger read for the market is simple. In this administration, weak controls at a major bank are treated as a national security exposure -- and the price is now measured in billions.
Treasury hit Bank of America with more than $1.2 billion in penalties for willfully failing to report over $5 billion in suspicious transactions tied to Chinese money laundering networks and southwest border illicit finance.
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