The United States fines Bank of America $1.2 billion, saying it violated money laundering and sanctions laws.

WASHINGTON — The U.S. Treasury Department announced Tuesday that it is fining Bank of America $1.2 billion for alleged violations of anti-money laundering and sanctions laws.

The fines imposed on the second-largest U.S. bank are the third largest in the department’s history.

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“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 financing risks,” Treasury Secretary Scott Bessent said in a statement. “Today’s actions send a clear message that even the largest financial institutions are not above the law.”

The Treasury said Bank of America also reached an $11.6 million settlement with the department’s Office of Foreign Assets Control for “apparent violations of numerous sanctions programs, including against Iran, Russia, narcotics and global terrorism.”

In a statement, Treasury said its Financial Crimes Enforcement Network (FinCEN) assessed the $1.2 billion penalty for Bank of America’s “failure to mitigate and report priority national security risks, including Chinese money laundering networks and illicit financing along the southwest border.”

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The fine includes $750 million that will be paid to the U.S. Office of the Comptroller of the Currency, the largest fine ever imposed by that federal banking regulatory agency.

The Treasury said Bank of America “admits that it willfully violated” the Bank Secrecy Act of 1970, which requires banks to help the government detect and prevent money laundering.

“Fighting financial crime is a serious issue and we have a responsibility to get it right,” Bank of America said in a statement. “We have worked with regulators to reach these sanctions resolutions arising from violations cited in the previously reported 2024 (Comptroller of the Currency) Consent Order and FinCEN’s investigation.

“We have invested billions of dollars in technology and dedicated thousands of employees to fighting financial crime, and our team is well advanced and committed to completing the work required to resolve the issues raised by our regulators.

The latest action is the third-largest sanction ever imposed by the Treasury Department, behind a roughly $4 billion settlement in 2023 with Binance, the world’s largest cryptocurrency exchange, and a roughly $3 billion settlement with Canada-based TD Bank the following year. Both of these historic actions occurred amid the Biden administration’s focus on anti-money laundering and efforts to promote compliance with the then-emerging virtual currency industry.

Months later, Binance founder and CEO Changpeng Zhao was sentenced to four months in prison for looking the other way as criminals used his platform to transfer money linked to child sexual abuse, drug trafficking and terrorism.

Amiri reported from New York. AP Business Writer Alex Veiga in Los Angeles contributed to this story.