Bank of America Failed to Report $5 Billion in Suspicious Transactions, Treasury Says
The U.S. Department of the Treasury announced enforcement actions against Bank of America on October 13, 2026, over alleged and admitted failures involving anti-money laundering controls and sanctions compliance. The announcement cited more than $1.21 billion in penalties, describing the action as the third-largest penalty in Treasury history and the largest in the history of the Office of the Comptroller of the Currency (OCC).
The Financial Crimes Enforcement Network (FinCEN), the OCC and the Office of Foreign Assets Control (OFAC) announced separate enforcement measures. The allegations and findings concern transaction monitoring, customer due diligence, suspicious activity reporting and payments involving individuals and entities subject to U.S. sanctions.
Treasury said the failures exposed the financial system to risks involving Chinese money laundering networks, potential narcotics trafficking, fraud and illicit finance connected to the U.S. southwest border. The case also raises questions about how large banks monitor transactions and respond to warning signs when their compliance systems identify potential financial crime.
Bank of America Failed to Report More Than $5 Billion in Suspicious Activity
FinCEN assessed a $1.2 billion penalty after Bank of America admitted to willfully violating the Bank Secrecy Act. According to Treasury, the bank failed to maintain an adequate anti-money laundering program, conduct required due diligence on foreign correspondent accounts and file suspicious activity reports in a timely manner.
The investigation identified weaknesses in the bank’s systems for detecting suspicious transactions and evaluating customer risks. Treasury said Bank of America relied heavily on law enforcement inquiries and referrals from other financial institutions instead of using effective internal controls to identify potentially illicit activity. Suspicious transactions were also left uninvestigated for extended periods.
FinCEN said the bank failed to report more than $5 billion in suspicious transactions on time. More than $1 billion of that activity involved national security-related and other priority risks, including transactions indicative of Chinese money laundering networks, fraud and potential trade-based money laundering connected to the southwest border.
Treasury also alleged that Bank of America did not respond adequately to repeated warning signs involving customers who relied extensively on payments from unknown third parties. Compliance personnel had raised concerns about possible narcotics proceeds, trade-based money laundering and fraud, but the bank’s response did not adequately address the identified risks.
Under the FinCEN consent order, Bank of America must work with a third party to review historical transactions and identify suspicious activity that may have gone undetected. The bank must also undergo independent reviews of its transaction monitoring, customer due diligence, foreign correspondent account controls and relevant data governance framework, with particular attention to risks involving the southwest border, Iran and Russia.
OCC and OFAC Actions Target Compliance and Sanctions Failures
The OCC separately announced a $750 million civil money penalty over what it described as a deficient and ineffective anti-money laundering compliance program. Treasury said the bank’s monitoring systems failed to properly monitor transactions involving trillions of dollars, contributing to large numbers of delayed suspicious activity reports involving billions of dollars.
The OCC also cited weaknesses in compliance staffing, training and internal audits. According to the announcement, key personnel lacked sufficient expertise to manage the program effectively, while the audit function failed to identify longstanding problems later uncovered by examiners. The bank remained subject to a December 2024 cease-and-desist order requiring improvements, yet Treasury said significant deficiencies continued after that order.
OFAC announced an $11.6 million settlement covering 475 apparent violations of multiple U.S. sanctions programs. The alleged violations involved payments routed through blocked banks, designated individuals accessing funds, delayed updates to sanctions watchlists and business accounts associated with blocked persons. The affected sanctions programs included those targeting Russia, Belarus, Iran, Burma, Somalia, narcotics and global terrorism.
Treasury said the apparent violations resulted partly from technical and human errors, including problems with sanctions alerts and payment processing. OFAC characterized the violations as non-egregious and said they were largely not voluntarily self-disclosed. The settlement included commitments related to employee training, testing, audits and future cooperation with the agency.
The enforcement actions reinforce the importance of effective financial crime controls at major banks, particularly as institutions process large volumes of domestic and international payments. For customers and investors, the immediate significance lies in the scale of the compliance failures and the required reviews and remediation. The Treasury announcement does not establish that every transaction identified was criminal, but it documents serious deficiencies in the bank’s systems for identifying and reporting suspicious activity.
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