News — Noozify Original — October 20, 2026

Bank of America's $1.2 Billion Money-Laundering Penalty: What the Bank Missed

By Adam Cannizzaro

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On October 13th, three arms of the Treasury Department announced penalties of more than $1.21 billion against Bank of America, the second-largest bank in the United States, for failing at one of the jobs federal law gives every bank, which is to watch for money laundering and report it. The largest piece, a $1.2 billion penalty from the Financial Crimes Enforcement Network, or FinCEN, is the third-largest in Treasury's history. In its consent order, the bank admits that it willfully violated the Bank Secrecy Act from at least January 2018 through July 2025. In this civil setting, the order explains, willful covers reckless disregard and willful blindness, not only deliberate intent. None of the three agencies' announcements involves criminal charges.

The Bank Secrecy Act dates to 1970. It requires banks to run an anti-money-laundering program and, among other things, to report cash transactions over $10,000 and to report suspicious activity that might signal money laundering or other crimes. When a bank knows or suspects that a transaction of $5,000 or more may be illicit, it has 30 days from first spotting it to file a suspicious activity report, or SAR, and no more than 60 if it needs time to identify a suspect. The reports are confidential, and they are one of the main ways investigators learn about fraud, drug money, and sanctions evasion. Banks that hold accounts for foreign banks must also check who those banks are and what the money moving through them is for.

The amounts overlap. FinCEN's $1.2 billion counts the $750 million penalty from the Office of the Comptroller of the Currency, the bank's main federal regulator, which the OCC calls the largest in its history. The Office of Foreign Assets Control, which enforces sanctions, added $11,662,930 for 475 apparent sanctions violations, and the three together come to $1,211,662,930. The bank set aside $1.2 billion for the penalties in its third-quarter results, which cut its quarterly earnings by 17 cents a share. By our arithmetic, the total is about 4 percent of the roughly $30.5 billion in annual profit that FinCEN's order cites.

The order runs to 95 pages, and most of it describes how the bank's monitoring worked. Its main tool was an in-house system called Event Processor, first put in place in 2010. It scored the activity on each customer and sent the customer to an investigator only after the score reached 20 points within 13 months, a threshold the order says was "initially set by stakeholder judgment" and left in place until December 2023. When the bank lowered it, a one-time review found that it had failed to identify and file nearly 8,900 SARs covering close to $4 billion in transactions. Clearing that work took an extra 750 employees and 800 consultants. In several years, more than a third of the bank's investigations began because something arrived from outside, such as a subpoena or a request from law enforcement, rather than with one of the bank's own alerts.

The OCC's order adds numbers of its own. Between 2019 and 2023, it says, bank managers, including the officer responsible for compliance with the law, "received written reports showing that the Bank was failing to file [SARs] on approximately 18%-44% of potentially suspicious activities not referred for investigation." The queue of cases waiting for investigators peaked at nearly 200,000 in 2024. The bank neither admits nor denies the OCC's findings.

FinCEN's longest example involves three customers it does not name, two online marketplaces for salvaged cars and a vehicle exporter. Between October 2020 and May 2025 they received more than 680,000 money orders, forming about 220,000 suspicious groups worth more than $660 million. Many were bought in runs of $2,900 to $3,000, just under the $3,000 level at which a buyer must show identification, and about one group in three was bought near the southwest border. The customers also moved nearly $1 billion in wires the order describes as suspicious, mostly involving Georgia, Belarus, and other former Soviet states, much of it after Russia's invasion of Ukraine in February 2022. The exporter had been profiled at $1 million to $4 million a year in sales and moved more than $700 million in high-risk wires in about three years. The bank's own staff called the number of investigations these accounts set off "insane." Its first report on the wires came in August 2023 and covered about a tenth of them, and most of the rest was reported in June 2025, after FinCEN asked.

The order also points to "hundreds of millions of dollars" in transactions bearing the marks of Chinese money-laundering networks, which FinCEN has called "one of the most significant money laundering threat actors facing the U.S. financial system." The networks supply dollars to Chinese citizens trying to get around China's cap of about $50,000 a year on currency conversions. At Bank of America, according to the order, the pattern showed up as customers who said they worked in logistics or electronics making back-to-back credit card purchases, paying off other people's cards, and wiring money to China "for goods."

The sanctions case is smaller and mostly about plumbing. Between February 2022 and March 2025, 403 payments worth about $14.3 million went through 35 banks under U.S. sanctions, 32 of them Russian, because a vendor's routing directory still listed them. Alerts on exact matches to a sanctioned person's name and date of birth were ranked as low or medium priority, which let three sanctioned individuals make 31 transactions, and a vendor error left the bank's watchlist without updates from May 24 to June 28, 2023. OFAC rated the violations "non-egregious" but noted that most were not voluntarily disclosed. The bank agreed to settle what OFAC calls its potential civil liability.

None of this was new to regulators. In December 2024, the OCC put the bank under a cease-and-desist order that carried no fine but required it to repair its monitoring and review past activity. More than a year later, the OCC now says, the bank "still failed to escalate potentially suspicious activities to investigators for review." "The bank's poor response to its BSA deficiencies is unacceptable," Comptroller of the Currency Jonathan V. Gould said. Treasury Secretary Scott Bessent said, "Today's actions send a clear message that even the biggest financial institutions are not above the law."

Bank of America said in a statement quoted by the Associated Press that "financial crime compliance is serious, and we are responsible for getting it right." It said it has invested billions of dollars in technology and dedicated thousands of employees to fighting financial crime, and that its team is "far along with and committed to completing the work required to address the issues raised by our regulators."

FinCEN's order also requires four reviews by independent consultants at the bank's expense, among them a fresh look at suspicious activity from January 2022 onward, with priority on the southwest border and possible drug trafficking, Chinese money-laundering networks, Iran, and Russia. In size, the FinCEN penalty sits behind two others. Binance, the cryptocurrency exchange, was assessed $3.4 billion by FinCEN in 2023, and TD Bank $1.3 billion in 2024, part of about $3 billion in penalties that came with a guilty plea. The reports Bank of America failed to file are the ones investigators rely on to follow money from fraud, drug sales, and sanctioned banks, which is why the orders spend as much space on getting those reports filed as on the fine.