Bank of America: $1.2 billion fine for 5 billion ignored suspicious transactions

Alarm muted in Charlotte. Money has no smell, said Vespasien, and Bank of America did not smell anything for seven years. On October 13, the US Treasury fined the second-largest bank of the United States more than $1.2 billion. At issue: a deliberate violation of the anti-money laundering law.

More than $5 billion in suspicious flows escaped mandatory reporting or arrived late. An amount worthy of the big crypto deals that Wall Street so likes to cite as an example.

Bank of America signs third fine in FinCEN history

Bank of America admits to willful violation of the Bank Secrecy Act. This federal law requires banks to report any suspicious transactions to the authorities. The press release from FinCEN (the Treasury's anti-money laundering unit) also details other confessions. Among them are a compliance program below minimum requirements and weak controls on accounts opened with foreign banks.

The bill exceeds $1.2 billion. Only Binance (3.4 billion in 2023) and TD Bank (1.3 billion in 2024) paid more to FinCEN. The OCC (the federal regulator of national banks) recovers 750 million, its heaviest sanction to date. OFAC, the armed arm of American economic sanctions, then adds $11.6 million. The sum covers 475 apparent violations affecting Russia, Belarus, Iran, Burma, Somalia, drug trafficking and terrorism.

Scott Bessent didn't wear gloves. Even the largest financial institutions “are not above the law,” said the Treasury Secretary. For his part, OCC boss Jonathan Gould describes the bank’s response to its own failures as “unacceptable”.

Bank of America's anti-money laundering software set too high

It all starts with software called Event Processor. Responsible for screening transactions, he worked from January 2018 to July 2025. His alert threshold was set at 20 risk points. However, Bank of America only reduced it to 10 or 12 points in December 2023.

More than $5 billion in suspicious transactions were not reported on time. About 1 billion was linked to national security risks. Furthermore, a retrospective audit carried out in 2024 unearthed nearly 8,900 suspicious transaction reports never transmitted. They involved some 4 billion dollars. This form (the SAR) is the alert that any American bank must send to FinCEN when faced with a doubtful flow.

Do you want to measure the delay? In fact, more than a third of internal investigations did not start from a software alert. They came from an external request: police, legal summons, request from another bank. The Charlotte bank estimated that it would have to recruit 750 people and mobilize 800 consultants to absorb the new threshold.

From car wrecks to Chinese networks

Two clients specializing in online auctions of damaged vehicles illustrate the problem. Between 2020 and 2025, they deposited tens of billions of dollars in payment securities. More than $600 million in suspicious warrants were never reported. FinCEN sees this as money laundering through trade. In other words, dirty money circulates under the cover of sales of goods, in this case cars destined for scrapping. About a third of these flows pointed towards the Mexican border.

A client in the same industry had approximately $6 million in annual revenue. However, he received more than 1.7 billion dollars in transfers from countries bordering Russia. At Bank of America, hundreds of millions of dollars in credit card purchases bore the signature of Chinese laundering networks. Here again, the reports were sent late.

The screening of sanctions also had a hole. According to CNN, a transaction could match the name and date of birth of a sanctioned person. However, it was not treated as a priority.

Wall Street faces its anti-crypto moral lesson

Binance paid $4.3 billion in 2023 and its founder Changpeng Zhao spent four months in prison. On the other hand, Bank of America does not face any action from the Department of Justice, unlike Binance and TD Bank. Dennis Kelleher, head of the NGO Better Markets, considers the fine modest compared to the bank's income. “Banks don’t break the law, it’s people who do,” he recalls.

Bank of America shares fell more than 2.5% in after-hours trading on October 13. Its third quarter results fall the next day. A week earlier, the OCC had already fined American Express $350 million. His device had leaked some 13 billion suspicious flows for more than ten years.