Charlotte-headquartered Bank of America was assessed a $1.2 billion penalty by the U.S. Department of the Treasury on Tuesday for its “failure to mitigate and report priority national security risks, including Chinese money laundering networks and illicit finance along the southwest border.”
The largest penalty in the history of Office of the Comptroller of the Currency and third largest in Treasury history comes 28 days after China and its Wuhan University was cited in a U.S. Department of Education probe into Duke University and its Duke Kunshan University joint campus.
When it comes to national security and American archrival China, North Carolina has a growing list of missteps. In contrast, it also has a Republican majority Legislature that in June got the NC Farmland and Military Protection Act (House Bill 133) across the finish line for a July signing into law by the governor.
Bank of America is an industry leader, seventh largest in the world, and second-largest only to JPMorgan Chase in America by total assets estimated at $2.49 trillion to $2.65 trillion. While the penalty sum is significant, in reality it is forty-eight thousandths of 1% on the lower end of estimated total assets.
“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,” Treasury Secretary Scott Bessent said in a statement. “Today’s actions send a clear message that even the biggest financial institutions are not above the law.”
Banks are required by law to help the government detect and prevent money laundering.
The bank released a statement saying in part, “Financial crime compliance is serious, and we are responsible for getting it right.”
More than $1 billion of the unreported activity involved national security and other priority risks, Treasury said, including transactions indicative of Chinese money laundering networks, fraud and potential trade-based money laundering with what the department called “a substantial nexus to the southwest border.”
The Department of Education is investigating foreign funding tied to America’s national defense against China in the Duke probe. The Education Department said its auditing found incomplete, inaccurate and untimely disclosures in the records of the 6,500-undergrad private institution in Durham.
Duke University chose as a partner, a letter to its president says, an institution in China that “operates multiple national defense research laboratories, conducts research in at least five designated defense research areas, trains People’s Liberation Army cyber warfare specialists, and plays a central role in China’s Beidou satellite system, which supports missile guidance and military intelligence operations.”
Duke’s total research expenditures, nearly one-third from federal money, in fiscal year 2024 were $1.5 billion. This includes $863 million from the U.S. Departments of Defense, Energy, Agriculture, the National Science Foundation, the National Aeronautics and Space Administration, and the National Institutes of Health.
A month earlier, in August, guilty pleas were entered in the U.S. District Court for the Western District of North Carolina in a money laundering scheme with drug trafficking proceeds involving two Chinese men and a Californian. And again involving America’s southwest border. Prosecutors say Maoxuan Xia and Zhou Yu of China, and Shao Neng Lin of California, laundered more than $92 million primarily through Mexico.
On at least three other occasions in the last five years, North Carolinians or companies in the state have run afoul dealing with China.
In February 2025, Raleigh owner David Bohmerwald of Components Cooper Inc. pleaded guilty to trying to send accelerometer technology with military application to China. The order of 100 he purchased and attempted to send never made it.
The Justice Department says, “When used for military applications, accelerometers are crucial to structural testing, monitoring, flight control, and navigation systems. The technology can help missiles fly better and measure the precise effect munitions have on structures.”
Three Wilmington businesses sharing the same street address – Quicksilver Manufacturing, Rapid Cut and U.S. Prototype – had export privileges halted in June 2022. The Bureau of Industry and Security said the companies were in violation of exporting sensitive technical drawings and blueprints of 3D-printing satellite, rocket and defense prototypes to China.
Honeywell, globally headquartered in Charlotte, in May 2021 reached a $13 million civil penalty with the U.S. Department of State. Federal authorities had levied 34 charges involving the unauthorized export and retransfer of ITAR-controlled technical data to China, Taiwan, Canada, Ireland and Mexico that included engineering prints for the F-35, F-22, B-1B and gas turbine engines.
ITAR is an acronym for International Traffic in Arms Regulations. ITAR data refers to any technical data or information related to defense articles or services that are on the United States Munitions List.
