Bank Of America Faces $1.21 Billion In US Penalties Over Suspicious Transactions

(MENAFN- Khaama Press) Bank of America, the second-largest bank in the United States, faces more than $1.21 billion in federal penalties after regulators found serious failures in its efforts to detect and report suspicious financial transactions, the U.S. Treasury Department said Tuesday.

The Treasury said the bank failed to report more than $5 billion in suspicious transactions to the Financial Crimes Enforcement Network (FinCEN) in a timely manner. More than $1 billion of that activity involved national security concerns and other high-priority illicit finance risks, including transactions indicative of Chinese money-laundering networks, fraud and possible trade-based money laundering linked to the U.S. southwest border.

According to the department, the bank relied too heavily on law-enforcement inquiries, referrals from other financial institutions and other outside warnings instead of using its own internal monitoring systems to identify potentially suspicious activity. Regulators also said the bank allowed some suspicious transactions to remain uninvestigated for extended periods.

As part of the settlement, Bank of America admitted to willful violations of the Bank Secrecy Act, including failures to maintain an adequate anti-money-laundering program, conduct required due diligence on certain foreign correspondent accounts and file suspicious activity reports. The agreement requires the bank to work with an independent third party to review past transactions and identify activity that may have gone unreported.

The Office of the Comptroller of the Currency separately imposed a $750 million civil penalty, the largest in the agency's history, citing deficiencies in the bank's anti-money-laundering compliance program. The regulator said serious problems persisted despite a December 2024 order requiring the bank to address longstanding weaknesses.

The Treasury's Office of Foreign Assets Control also reached an $11.6 million settlement with the bank over 475 apparent violations of U.S. sanctions programs involving countries and activities including Russia, Iran, narcotics and global terrorism. The sanctions settlement is separate from the main FinCEN and OCC actions.

Bank of America said it had devoted substantial financial and personnel resources to addressing regulators' concerns and improving its compliance systems. The bank said the penalty would be recorded in its third-quarter financial results and would significantly reduce its net income.

The enforcement action follows years of regulatory scrutiny over the bank's anti-money-laundering controls. U.S. officials said effective monitoring and timely reporting by financial institutions are essential to preventing money laundering, sanctions evasion and the financing of other illicit activities.

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