Bank of America has been fined $1.2 billion by the Office of the Comptroller of the Currency (OCC) and the Financial Crimes Enforcement Network (FinCEN) for failures in its Bank Secrecy Act and anti-money laundering compliance programs.
The OCC issued a $750 million civil money penalty, its largest ever. FinCEN is responsible for the remainder of the $1.2 billion total fine, crediting the OCC penalty against its portion.
The failures resulted in the bank missing or delaying reports for over $5 billion in suspicious activity. Roughly $1 billion of this activity involved national security-related and other priority illicit finance risks, including suspicious transactions indicative of Chinese money laundering networks.
Details of Suspicious Activity
According to FinCEN's order, the bank "willfully failed to implement and maintain adequate internal controls for BSA compliance." The suspicious activity patterns included:
- High volumes of back-to-back credit card purchases at major retailers and shipping companies inconsistent with customer profiles
- Regular, large-value ACH and bill pay transactions to pay off balances for credit cards issued by third-party financial institutions in the names of third-party individuals with no apparent commercial purpose
- Large wire transfers to counterparties in China with generic descriptions such as "for goods" and no discernible business rationale
- Substantial, repeated transfers to counterparties with no web presence operating from residential addresses demonstrating an apparent lack of legitimate commercial purpose
Additional Compliance Gaps
FinCEN also found that the bank's due diligence on correspondent accounts held by its own foreign branches and affiliates fell short. Some regulatory questionnaires were completed by the bank on behalf of all its foreign branches and affiliates, while others were completed for specific foreign branches and affiliates.
The fine follows a $350 million penalty the OCC recently levied against American Express.
