MEXICO · SECURITY
Key Facts
- The country Mexico, the US’s southern neighbour, is home to the Sinaloa and Jalisco New Generation cartels, which Washington lists as terrorist organisations.
- What happened The US Treasury announced more than US$1.21 billion in penalties against Bank of America on Tuesday 13 October for money-laundering and sanctions failures.
- The Mexico link Roughly US$1 billion of the suspicious activity touched priority risks, including Chinese laundering networks and possible laundering through trade tied to the US-Mexico border.
- The bill The Treasury’s anti-money-laundering bureau imposed US$1.2 billion, including a record US$750 million paid to the bank regulator, plus a US$11.7 million sanctions settlement.
- The period The failures ran from at least 1 January 2018 to 1 July 2025, and the bank admits wilful violations in the civil sense.
- What comes next An outside firm must hunt for missed suspicious transactions, and independent reviewers will test how the bank handles cartel, Iran and Russia risks.
- Power Index Mexico ranks 2nd of 14 in The Rio Times Latin America Power Index, with 71.4 points (October 2026 edition).
The US Treasury on Tuesday 13 October announced more than US$1.21 billion in penalties against Bank of America for anti-money-laundering and sanctions failures. The Bank of America fine covers years of missed or late suspicious-activity reports, including transactions linked to Chinese laundering networks and the US-Mexico border.
The package includes the third-largest penalty in Treasury history and a record one from the national bank regulator. For Americans, it ties the second-largest US bank to suspicious payments bearing the marks of Chinese networks that launder cartel drug money.
What the Treasury Found
The Financial Crimes Enforcement Network (FinCEN), the Treasury bureau that polices money laundering, imposed US$1.2 billion of the total. It found the bank failed to report more than US$5 billion in suspicious transactions on time between 1 January 2018 and 1 July 2025.
Bank of America admits it wilfully broke the Bank Secrecy Act, the main US anti-money-laundering law, in the civil sense of the term. FinCEN says the bank put its revenue first and leaned on law-enforcement inquiries and other banks’ tips instead of its own monitoring.
For several years, more than a third of its suspicious-activity investigations were triggered by outside requests or manual referrals rather than its automated systems. Suspicious activity also piled up uninvestigated for long periods, so reports reached law enforcement late and were of limited use.
How the Mexico Link Works
An August 2025 FinCEN advisory describes Chinese networks laundering money for Mexico’s cartels, including Sinaloa, Jalisco New Generation and the Gulf Cartel. China caps the yuan its citizens may convert into other currencies at about US$50,000 a year, creating strong demand for dollars.
A Chinese network in the United States takes a cartel’s drug dollars while partners in Mexico pay the cartel in pesos almost instantly. Chinese buyers pay for those dollars in yuan inside China, and the cash is typically laundered through the US financial system.
FinCEN found hundreds of millions of dollars in transactions with the marks of these networks that Bank of America failed to report properly. Most came from customers claiming to be logistics or electronics firms, with large wires to China under vague labels such as “for goods”.
Other red flags were back-to-back credit-card purchases at major retailers and payments to firms with no web presence run from homes. Many of these payments went through even after the bank tightened its monitoring system.
In Mexico, the business magazine Expansión reported the case, stressing the roughly US$1 billion tied to Chinese networks and the southwest border. On the same day, Treasury separately targeted a horse-racing network tied to the Cartel del Noreste, a cartel based in north-eastern Mexico.
Car Auctions and Money Orders
One border-linked pattern ran through two online car-auction platforms that link sellers of salvaged US vehicles with buyers at home and abroad. Between October 2020 and May 2025, they received more than 680,000 deposits forming about 220,000 suspicious groups worth over US$660 million.
Many groups were three sequential money orders totalling just under US$3,000, the level at which issuers must verify a buyer’s identity. Roughly one in three groups was bought at locations with a nexus to the southwest border, the US frontier with Mexico.
FinCEN called the pattern consistent with structuring, meaning splitting payments to dodge reporting rules while moving possible illicit proceeds. Staff warned of fraud and trade-based laundering, which hides dirty money in trade, yet red flags including possible drug-money ties got no timely response.
Three Treasury Agencies Share the Bill
The Office of the Comptroller of the Currency (OCC), which supervises national banks, assessed a US$750 million penalty for a deficient and ineffective compliance programme. FinCEN credits that payment against its own US$1.2 billion penalty, so Bank of America pays the Treasury a further US$450 million.
The OCC found the bank failed to properly monitor trillions of dollars in transactions and was already under a December 2024 cease-and-desist order. More than a year after that order, the bank still failed to send potentially suspicious activity to investigators.
The Office of Foreign Assets Control (OFAC), Treasury’s sanctions enforcer, settled for US$11,662,930 over 475 apparent violations between September 2021 and April 2025. They involved programmes on Russia, Belarus, Iran, Burma, Somalia, narcotics and global terrorism, and OFAC judged them non-egregious.
Treasury Secretary Scott Bessent said financial institutions are on the front lines of protecting economic and national security. “Today’s actions send a clear message that even the biggest financial institutions are not above the law,” he said.
What It Means for You
For shareholders, the Bank of America fine equals roughly 4% of the bank’s latest annual net income of about US$30.5 billion. Its parent trades in New York as BAC, and the bank holds about US$2.7 trillion in assets and over 3,500 US branches.
The orders reach into the bank’s back office, where an outside firm must hunt for missed suspicious transactions and report them to FinCEN. Independent reviewers will also test how well the bank handles priority risks tied to the US-Mexico border, cartels and drug trafficking, Iran and Russia.
For firms trading with Mexico or China, the order flags heavy reliance on payments from unknown third parties and vague wires abroad. Treasury also told banks they cannot use law-enforcement inquiries or other banks’ referrals as substitutes for their own monitoring.
What Is Not Known
Treasury has not named the car-auction platforms, the electronics and logistics customers or any cartel tied to specific transactions. Treasury announced no criminal charges, and Tuesday’s actions are civil steps by three of its own agencies.
Bank of America’s newsroom carried no statement on the penalties by early Wednesday 14 October. Its outside reviewer must deliver only a plan for the lookback within 150 days of hiring, so results will take months.
More: Mexico news in English, every day from The Rio Times.
Frequently Asked Questions
How much must Bank of America pay?
Bank of America faces more than US$1.21 billion in Treasury penalties, made up of a US$1.2 billion FinCEN penalty and a US$11,662,930 OFAC settlement. The OCC’s US$750 million counts toward the FinCEN amount, so the bank pays the Treasury a further US$450 million.
What does Mexico have to do with the Bank of America fine?
Roughly US$1 billion of the missed or late-reported activity involved priority risks, including Chinese laundering networks and possible trade-based laundering tied to the US-Mexico border. FinCEN says such networks take cartels’ drug dollars in the United States and pay the cartels in pesos in Mexico.
Did Bank of America admit wrongdoing?
The bank admits it wilfully violated the Bank Secrecy Act, in the civil sense of wilfulness. That covers failures in its anti-money-laundering programme, its checks on foreign correspondent accounts and its suspicious activity reports.
Is this a criminal case?
Treasury announced no criminal charges, and the actions are civil penalties and a settlement from three of its agencies. The bank must also pay for an outside lookback and independent reviews of its controls.
When will the review of missed transactions start?
The bank has 60 days to propose an outside reviewer, which must deliver its review plan within 150 days of being hired. FinCEN can veto the choice and may amend the scope of the review after receiving that plan.
Sources: US Department of the Treasury: U.S. Treasury Announces Record Enforcement Actions Against Bank of America, 13 October 2026; FinCEN: Consent Order Imposing Civil Money Penalty, In the Matter of Bank of America, N.A. (2026-03), 13 October 2026; OFAC Enforcement Release: Bank of America, N.A. settlement over apparent violations of multiple sanctions programs, 13 October 2026; FinCEN Advisory FIN-2025-A003 on Chinese Money Laundering Networks used by Mexico-based cartels, 28 August 2025; Expansión: Sanciona Departamento del Tesoro a Bank of America con 1,210 mdd, 13 October 2026.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief