The U.S. Treasury Department announced Tuesday that it is imposing more than $1.2 billion in penalties against Bank of America, the nation’s second-largest bank, over alleged violations of anti-money laundering and sanctions laws. The penalties rank as the third-largest in Treasury Department history.

Treasury Secretary Scott Bessent said the bank’s compliance failures exposed the broader U.S. financial system to risks associated with illicit financial activity.

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

The Treasury’s action includes penalties related to failures to report suspicious transactions and deficiencies in the bank’s anti-money laundering program. Regulators have also raised concerns about the bank’s compliance with sanctions targeting countries and entities connected to Iran, Russia, narcotics trafficking and global terrorism.

Separately, the Treasury Department’s Office of Foreign Assets Control reached an $11.6 million settlement with Bank of America over apparent violations of multiple sanctions programs.

The latest penalties follow earlier regulatory action against the bank. In December 2024, the Office of the Comptroller of the Currency issued a cease-and-desist order over deficiencies in Bank of America’s Bank Secrecy Act and sanctions compliance programs, citing failures to file suspicious activity reports promptly and address previously identified shortcomings. The order required corrective measures, including an independent assessment of the bank’s compliance systems.

The enforcement action underscores the federal government’s efforts to hold major financial institutions accountable for detecting suspicious transactions and preventing the financial system from being used to facilitate criminal activity or evade U.S. sanctions.