Bank of America Penalized $1.2 Billion for Violating Iran, Russia Sanctions

The U.S. Treasury Department announced on Tuesday that Bank of America (BoA) has been penalized over $1.2 billion for violating sanctions and failing to report national security risks.

The action was described as “the third-largest penalty in Treasury history and the largest in the Office of the Comptroller of the Currency (OCC) history.”

The penalties were assessed by three independent bureaus of the Treasury Department that have related missions. The oldest is the Office of Foreign Assets Control (OFAC), which administers economic sanctions and monitors financial threats to American national security. The OCC charters and regulates American banks and savings associations, along with U.S. branches of foreign banks. The Financial Crimes Enforcement Network (FinCEN) protects the U.S. financial system against illicit activity, such as money laundering and terrorist networks.

“Financial institutions are on the front lines of protecting our economic and national security,” said Treasury Secretary Scott Bessent. “When a bank of this size fails to meet its anti-money laundering and sanctions obligations, the consequences extend far beyond its own walls, exposing the entire U.S. financial system to significant illicit finance risks.”

“Today’s actions send a clear message that even the biggest financial institutions are not above the law,” Bessent said.

The penalties included $1.2 billion assessed by FinCEN for BoA’s “failure to mitigate and report priority national security risks, including Chinese Money Laundering Networks and illicit finance along the southwest border.”

The OCC hit BoA with $750 million in fines for “deficient and ineffective” compliance with its anti-money laundering program, while the Office of Foreign Assets Control (OFAC) said the bank settled on $11.6 million in penalties for violating sanctions against “Iran, Russia, narcotics, and global terrorism.”

In a separate release, OFAC additionally listed “apparent violations” of sanctions against Belarus, Burma, and Somalia. The agency said BoA’s routing system for financial transactions included banks that had been banned by OFAC – sometimes because BoA was allegedly slow to add the banned banks to its “sanctions screening filter,” and sometimes due to human error, or alerts from BoA analysts that were improperly “suppressed.”

These alleged violations mostly occurred in 2022 and 2023, although a few errors were identified in 2025. OFAC gave BoA credit for making improvements, but also blasted the bank for submitting “piecemeal or incomplete disclosures” to the agency, and for taking much too long to correct its sanctions compliance procedures.

The massive $1.2 billion penalty from FinCEN was due to Bank of America allegedly “willfully violating” the Bank Security Act (BSA) by failing to implement an adequate Anti-Money Laundering (AML) program. This led to the bank indulging over $5 billion in “suspicious transactions,” with about $1 billion of that sum classified as “national-security related and other priority illicit finance risks,” including money laundering networks run by the hostile Chinese government and southern drug cartels.

FinCEN said BoA “prioritized its revenues and minimized the impact on its required compliance resources,” to the extent that it effectively “outsourced to third parties a substantial portion of its proactive detection and reporting obligations.”

“The Bank also allowed suspicious activity to accumulate uninvestigated for extended periods without investigation, resulting in late reporting of limited utility to law enforcement,” FinCEN said.

The Treasury Department noted that BoA was hit with a cease-and-desist order in 2024 related to its “deficient BSA/AML compliance program,” but Treasury said the bank still allowed transactions with “indicia of money laundering” to slip through the cracks. Treasury said BoA “knew for years that it was failing to escalate potentially suspicious activity to investigators.”

BoA responded to the Treasury announcement by acknowledging that “financial crime compliance is serious, and we are responsible for getting it right.”

“We have invested billions of dollars in technology and dedicated thousands of ​employees to combat financial crime, and our team is far along with and committed to completing the work required to address the issues raised ​by our regulators,” the bank said.

BoA said on Thursday that it missed its third-quarter profit estimates due to “reduced client activity and changing market conditions, including a major shift in interest rates.” The bank also announced it was booking the $1.2 billion penalty from the Treasury Department and the costs of complying with Treasury’s requirements.

“We will continue to support federal and local law enforcement across thousands of investigations and report hundreds of thousands of suspicious activity reports each year,” the bank pledged.

“Our third-quarter results will include a non-tax-deductible charge of $1.2 billion impacting net income by approximately 17 cents per share. We have already dedicated substantial personnel and resources to our ongoing remediation efforts, and those costs are in the current expense base,” the statement added.

Breitbart News reached out to Bank of America for comment, which referred back to its original statement in response to the Treasury announcement.

Bank of America CEO Brian Moynihan told CNBC on Wednesday that the bank hired a thousand contractors and spent “a couple hundred million plus” in the third quarter of 2026 on software remediation and regulatory issues related to anti-money laundering compliance. Some of those contractors were also tasked with patching system vulnerabilities exposed by the latest artificial intelligence (AI) models, such as Mythos from Anthropic.

Moynihan said he expects remediation costs to decline over time, thanks to the cumulative effect of system improvements. BoA stock dropped about five percent on Wednesday after it reported disappointing third-quarter results and announced its settlement with the Treasury Department.

OCC announced a cease-and-desist order and $350 million civil penalty against American Express National Bank last week, for failures to implement adequate BSA/AML procedures that were similar to the agency’s complaint against Bank of America.

“The OCC expects banks of American Express’s size and complexity to devote sufficient resources to ensure compliance with laws and regulations designed to detect and prevent money laundering, which are critical to both economic and national security,” Comptroller of the Currency Jonathan Gould said last Thursday.