Bank Pays $1.21B to Settle Charges Over Deficient AML Program

A bank settled FinCEN, OCC, and OFAC charges for failing to report suspicious activity and for processing payments that apparently violated sanctions.

FinCEN found that the bank (i) ignored suspicious activity that did not hit a certain threshold, (ii) failed to timely report over $5 billion in suspicious transactions, including more than $1 billion tied to Chinese money laundering networks, fraud, and possible southwest-border trade-based laundering, (iii) maintained high-risk online auto auction customers, (iv) used "simplified" due diligence for foreign branches' correspondent accounts, and (v) relied on law enforcement requests and others' tips to flag suspicious activity.

FinCEN cited Bank Secrecy Act ("BSA") violations for failing to maintain an AML program (31 CFR 1020.210), conduct correspondent due diligence (31 CFR 1010.610), and file suspicious activity reports ("SARs") (31 CFR 1020.320).

The OCC found (i) reports from 2019 to 2023 showing missed SARs on 18 to 44 percent of potentially suspicious activity that was not referred for investigation, (ii) an investigation backlog that neared 200,000 cases in 2024, (iii) inaccurate sender information on wires, and (iv) insufficient progress by the bank under its December 2024 cease-and-desist order. The agency cited 12 CFR 21.21 ("Procedures for monitoring BSA compliance"), 12 CFR 21.11 ("Suspicious Activity Report"), correspondent due diligence, and the Travel Rule (31 CFR 1010.410).

OFAC's enforcement release found 475 apparent violations, worth about $14.8 million, from September 2021 to April 2025, including 403 payments totaling $14.3 million sent to or through 35 blocked banks. An alert prioritization flaw and watchlist update failures allowed three designated individuals and other blocked parties to transact. The violations spanned Russia, Belarus, Iran, Burma, Somalia, narcotics, and terrorism programs.

FinCEN assessed a penalty of $1.2 billion, against which it credited the OCC's $750 million penalty, and OFAC settled for about $11.7 million, bringing Treasury's total to over $1.21 billion. FinCEN also required a third-party lookback at missed suspicious transactions and an independent review of monitoring, due diligence, and data governance, focused on the southwest border, Iran, and Russia.