SourcesFilm 08
A Large and Valued Client
On YouTube as “How Bank of America Laundered Chinese Cartel Money in Plain Sight”
Corrections and updates
None so far.
Cold Open: The Border Lights Up
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Consent order imposing a civil money penalty, In the Matter of Bank of America, N.A., No. 2026-03 (95 pages) archived
From at least 1 January 2018 to 1 July 2025 the bank missed or delayed reporting over $5 billion of suspicious activity, roughly $1 billion of it implicating national-security and priority risks, including activity indicative of Chinese money laundering networks, fraud and potential trade-based money laundering with a nexus to the southwest border (pp.4, 6); “the second largest bank in the United States” (p.5); warnings from its own staff (p.7); between October 2020 and May 2025 two customers received more than 680,000 money-order transactions totaling over $660 million, in groups of three, repeatedly totaling between $2,900 and $3,000, just under the $3,000 identification line, with roughly one in three groups bought at locations with a nexus to the southwest border (pp.53-54); compliance staff on one of the two customers: “WOW.” (p.40) and “an insane amount of cases/investigations” (p.42); wires to China with generic descriptions such as “for goods” (p.59)
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U.S. Treasury Announces Record Enforcement Actions Against Bank of America archived
More than $1.21 billion in penalties against “the second-largest bank in the United States”; failed to timely report over $5 billion in suspicious transactions; the bank “effectively outsourced” to third parties a substantial portion of its proactive detection; the third-largest penalty in Treasury history and the largest in the OCC’s history
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FinCEN Assesses $1.2 Billion Penalty against Bank of America archived
The penalty for failing to mitigate and report priority national security risks, “including Chinese money laundering networks and illicit finance along the southwest border”; the bank “admits that it willfully violated the BSA”
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Bank of America fined $1.2 billion by Treasury Department for violating money laundering and sanctions laws archived
“there is no accompanying Justice Department action for the Bank of America fine”
The Money Has Somewhere to Go
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Consent order, the two lanes archived
Customers that “purported to operate in the logistics or electronics industries”; back-to-back credit card purchases at major retailers and shipping companies; payments of card balances at other banks, some for cards in the names of unrelated individuals; large wires to China “for goods”; transfers to counterparties with no web presence operating from residential addresses; “hundreds of millions of dollars” in transactions indicative of Chinese money laundering networks and likely trade-based laundering (pp.58-59; FinCEN’s card red flags, fn 33, p.28); two online auto auctions selling U.S. salvaged vehicles to domestic and international buyers, customers since 1995 and 1996 (pp.33-34); 2016 case notes on the first of them: “narcotics trafficking through the purchase and shipment of vehicles” (p.36); the order names no cartel: the word appears only in the lookback consultant’s priorities, “the U.S. Southwest border, cartels, and possible narcotics trafficking” (p.69)
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Advisory FIN-2025-A003 on the Use of Chinese Money Laundering Networks by Mexico-Based Transnational Criminal Organizations to Launder Illicit Proceeds archived
China caps conversions at “approximately $50,000 each year” (fn 15); Mexico’s rules prevent large dollar cash deposits; a “mutualistic relationship” between the cartels and the networks; mirror transactions that avoid moving cash or wiring money across borders, “sometimes simultaneously”; laundering settled through trade in goods; the credit-card red flags (pp.3-6, 10)
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Financial Trend Analysis, Chinese Money Laundering Networks archived
2020-2024 Threat Pattern & Trend Information: 137,153 reports filed between 1 January 2020 and 31 December 2024, about $312 billion in suspicious activity associated with suspected Chinese money laundering network activity
The Alarm Set at Twenty
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Consent order, the Event Processor archived
Alerts grouped and scored, a group generally not investigated until it reached 20 points (pp.10-12); the threshold “initially set by stakeholder judgment” (p.10); the High Intensity Drug Trafficking Area factor weighted 1 point, with report yields above 50% (p.15); groups at 16 to 19 points ending in reports 38-45% of the time, seven to nine times the 5% false-negative tolerance the bank set later (pp.20-21); the bank’s estimate of 16,000 more investigations a month, “double” the volume, an “incremental 750” staff (p.13); a 2023 test finding an 18% report yield below the line, repeated at the direction of the then head of financial crimes, which called it “incorrect” and was “confident that EP is working as intended” (p.23); about 150,000 groups hit by rescoring logic, “thereby affecting the ability” to become a case (p.24); the line lowered to 10 or 12 points in December 2023, and the 2024 lookback finding nearly 8,900 unfiled reports covering nearly $4 billion (p.13); more than one-third of investigations prompted by outside events such as law enforcement referrals, subpoenas, requests from other institutions and employee referrals, nearly 50% in 2023 (pp.7, 25)
The Notes and the Customer
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Consent order, Customers A and B archived
Customer A a client since 1995, with a $200 million refinancing led by the bank (p.33); June 2020: “although [Customer A] is considered a suspect, account will not be closed” (p.37); activity “so vast” the investigation system could not download it; business email compromise, romance and COVID scams (pp.37-38); over 100 cases from 2020 to August 2022, most of them fraud; “YESSSSSSSSSSSS . . . Concern that the client does not have visibility or understanding of source of funds”; “WOW.”; interest from at least five federal agencies; the closure recommendation of July 2022 (p.40); too much risk and no evident way to control or mitigate it (p.41); “a large and valued client”, about $6 million a year in revenue; “an insane amount of cases/investigations” and “money laundering concerns, potentially facilitating transnational crime” (p.42); 290 wires from Belarus in August 2022, $3.5 million (p.43); “a closure here would be detrimental given the impact of this relationship”; January 2023: a law enforcement investigation “considers the activity through these [online auto auction] companies to be money laundering”; the recommendation withdrawn in March 2023; third-party payments until June 2025 (pp.44-46); Customer B, a publicly traded company (p.33), rated “Standard” until a grand jury subpoena in February 2020 (p.37); a September 2021 request from another financial institution about dozens of suspicious money orders in Customer B’s accounts, and the bank’s reply of no increase, no unusual velocity and no indicators of illicit activity (p.55); November 2023: one of these customers publicly disclosed a Justice Department investigation into potential violations of money laundering laws (p.35); the bank “likely saved hundreds of millions of dollars in compliance-related expenditures” and “made the decision to retain high-risk and high-value customers despite recommendations to the contrary from compliance” (p.64)
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Bank of America, N.A. Settles with OFAC for $11,662,930 Related to Apparent Violations of Multiple Sanctions Programs archived
475 apparent violations between 18 September 2021 and 24 April 2025, of programs including Russia, Belarus, Iran, narcotics and global terrorism
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Bank of America fined US$1.2 billion by U.S. government for failing to police suspicious activity archived
The bank’s statement, “Financial crime compliance is serious, and we are responsible for getting it right”
Sixteen Years of Fines
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Wachovia Enters into Deferred Prosecution Agreement archived
Money from Mexican currency exchange houses, the casas de cambio; $110 million forfeited and a $50 million fine; more than 20,000 kilograms of cocaine seized from planes bought with the money
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How a big US bank laundered billions from Mexico’s murderous drug gangs
Cash used to ship 22 tons of cocaine; the total fine “less than 2% of the bank’s $12.3bn profit for 2009”; no individual charged
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HSBC Holdings Plc. and HSBC Bank USA N.A. Admit to Anti-Money Laundering and Sanctions Violations, Forfeit $1.256 Billion in Deferred Prosecution Agreement archived
At least $881 million in drug trafficking proceeds, including from the Sinaloa Cartel in Mexico and the Norte del Valle Cartel in Colombia; $1.256 billion forfeited plus $665 million in civil penalties
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Transcript: Attorney General Eric Holder on ‘Too Big to Jail’ archived
Before the Senate Judiciary Committee, the size of some institutions makes it “difficult for us to prosecute them”
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Queens man admits orchestrating $653 million money laundering conspiracy, operating unlicensed money transmitting business, and bribing bank employees archived
Da Ying Sze laundered more than $653.3 million in cash from narcotics and other illicit proceeds through a variety of financial institutions, and gave gifts to bank employees
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TD faces DOJ probe over fentanyl-tied money laundering archived
Report: the investigation into TD was born out of the case against Sze
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The bank pleaded guilty; more than two dozen individuals charged, including two bank insiders
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TD Bank hit with $3B penalty in U.S. money laundering settlement archived
More than $3 billion in total to U.S. authorities
The Bill and the Tax
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Consent order, the penalty and the lookback archived
“willfulness” only as the term is used in civil enforcement, covering reckless disregard or willful blindness (p.5, fn 13); the OCC’s $750 million credited toward the $1.2 billion (p.67); outside consultants to review card payments, money orders and cross-border wires from January 2022 (p.68), with a report due no later than December 2028 (p.70)
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Bank of America fined $1.2 billion over money laundering violations archived
FinCEN calls it the third-largest penalty in Treasury history; Comptroller Gould: the OCC’s “largest [civil money penalty] ever assessed against a bank”
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BofA lifts Moynihan’s pay to $41m after profit surge: $41 million for 2025, up from $35 million archived
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Stock Market Today, Oct. 14: Bank of America Shares Fall 5% on Earnings Miss and Compliance Penalty
Closed at $51.39, down 4.76%, on the day of its third-quarter results
Interviews and hearings quoted
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Brian Moynihan, CEO of Bank of America, the day after the fine
“we have accountability for everything we do in a company, including a fine”
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Bill Bodner, Special Agent in Charge, DEA Los Angeles
Chinese criminal organizations “have such a desire for US dollars in cash”
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Bill Bodner, DEA Los Angeles: “Hey, Sinaloa cartel, let me introduce you to Chinese organized crime”
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Chinese Money Laundering Organizations: Cleaning Cartel Cash
Ricardo Mayoral, Assistant Director, Homeland Security Investigations, on mirror transfers: “a reciprocal payment or mirror transfer”
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Dirty Money: Chinese Organized Crime in Latin America
Leland Lazarus, national security analyst: “a silk road of crime”
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House Financial Services hearing on Chinese money laundering: “really a lifeline for the cartels”
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Brian Moynihan: “We’ve lowered the thresholds of reporting” and “we file a lot of SARs”
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“We will be responsible in all the ways that clients and regulators and the community would want you to be”
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Martin Woods, bank whistleblower and former Wachovia anti-money-laundering officer
“these are good dads, good husbands, good people”
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Sen. Carl Levin at the Senate Permanent Subcommittee on Investigations HSBC hearing
“HBUS conducted no monitoring of a banknotes account”
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Irene Dorner, CEO of HSBC Bank USA, at the same hearing: “We deeply regret and apologize”
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Jimmy Gurulé, Notre Dame law professor, on the HSBC deal: “We’re not talking about mere negligence”
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Attorney General Eric Holder before the Senate Judiciary Committee
“it does become difficult for us to prosecute them”
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Attorney General Merrick Garland on the TD Bank plea
“By making its services convenient for criminals, it became one”
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Brian Moynihan: “on the right course to remediate everything”
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Sen. Ben Ray Luján (D-N.M.) on fines without prosecutions: “it’s like a tax”