Bank of America penalized $1.2 billion for missing billions tied to Chinese money laundering

The Office of the Comptroller of the Currency (OCC) and the Financial Crimes Enforcement (FinCEN) have imposed a total $1.2 billion combined fine on Bank of America after the bank admitted failures its Bank Secrecy Act (BSA) and anti-money laundering compliance program resulting in more than $5 billion suspicious reports.

The OCC's portion of $750 million is the largest civil penalty the agency has ever issued.

FinCEN, which is responsible the remaining fine, credits $750 million against its total $1.2 billion, leaves its portion. The includes a credit for $750 million already paid to OCC from FinCEN makes $1.2 billion.

According the FinCEN order that Bank of America “willfully failed to implement and maintain adequate internal controls for BSA compliance” which resulted in missing or delayed for “over $1 billion suspicious activity with roughly $1 billion of implicating national security related and other priority illicit finance risks including transactions indicative of Chinese Money Laundering Networks.

Financial including “high volumes of back-to-back card purchases at major and shipping shipping companies inconsistent with customer profiles,” and “regular large-value ACH and bill pay transaction to pay off balances for credit cards issued by third-party financial institutions.

These included “cards in the name of third-parties individuals for which no apparent commercial purpose; large wire transfers to counterparties in China with generic descriptions (e.g., “for goods”) and no discernible business rationale; and substantial repeated transfers to counterparties with no web presence operating from residential addresses, demonstrating an apparent lack of legitimate commercial purpose.

FinCen determined the bank’s due diligence on correspondent accounts held its own foreign branches and affiliates fell short.

Regulators that “were questionnaires “were completed by the bank on behalf of all its internal foreign branches and affiliates, and were completed for specific foreign.

The OCC's record $1.2 billion fine follows its the recent $350 million levied on American Express.