Why was Bank of America fined $1.2 billion for money laundering and sanctions violations?

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1. 1

   The Rise of Bank Prosecutions

   Duke Law Scholarship Repository (Duke University) (Garrett)Published Jan 1, 2016Checked Oct 14, 2026

   “In the wake of the last financial crisis, however, critics have begun to ask whether prosecutors adequately held banks and bankers accountable for their crimes. In this Essay, I describe the remarkable rise in the number of bank prosecutions in recent years, as well as the still steeper rise in criminal penalties imposed on banks. 2015 was the year that bank prosecutions finally came into their own, both in the record-breaking size of the fines and in the numbers of cases resolved. While the DOJ can claim marked achievements in recent years, which I detail here, I nevertheless caution against treating these data as fully answering critics’ concerns. Despite the apparent rise of bank prosecutions, important “too big to jail” concerns remain: prosecution deals are inadequate both as punishments and as rehabilitative efforts designed to promote compliance. Upon closer examination, the recent string of bank prosecutions, while noteworthy, fails to address persistent concerns that deterrent fines are not routinely imposed, that compliance terms designed to rehabilitate firms are not used effectively, and that individuals remain largely un-prosecuted.”

2. 2

   Regulation by Settlement

   Kansas Law Review (Turk)Published Jan 1, 2017Checked Oct 14, 2026

   “41.Brandon L. Garrett, The Rise of Bank Prosecutions, 126 YALE L.J.F.33, 36 (2016), http://www.yalelawjournal.org/forum/the-rise-of-bank-prosecutions.Specifically, the amount paid by financial institutions increased from zero in 2001 to almost seven billion in 2015.See id.42. Goldman, Sachs & Co., Litigation Release No. 21592, 98 SEC Docket 3135, 2010 WL 2799362 (July 15, 2010).Compare a 2002 settlement with Xerox, in which "the SEC obtained its first $10 million [enforcement] penalty" against a securities issuer.Atkins & Bondi, supra note 38.43.All told, regulatory enforcement actions against banks for securitization practices has been estimated to have resulted in $110 billion in penalties.Christina Rexrod & Emily Glazer, Big Banks Paid $110 Billion in Mortgage-Related Fines.Where Did the Money Go?, WALL ST.J. (Mar.9, 2016), https://www.wsj.com/articles/big-banks-paid-110-billionin-mortgage-related-fines-where-did-the-money-go-1457557442.44.In 2014 alone, enforcement actions by the CFTC reportedly resulted in $3.14 billion in civil penalties.Press Release, U.”

3. 3

   Deferred Prosecutions in the Corporate Sector: Lessons from LIBOR

   bepress Legal Repository (O’Brien & Dixon)Published Mar 8, 2014Checked Oct 14, 2026

   “Since 2008, the global economic downturn has significantly in-creased operating pressures on major corporations. Additionally, there has been a corresponding increase in corporate tolerance for corruption, which has coincided with a marked preference by regulators in settling, rather than litigating, enforcement actions. This Article argues that the expansion of prosecutorial authority without appropriate accountability restraints is a major tactical and strategic error. It evaluates whether the mechanism can be made subject to effective oversight. It argues that the current frame-work in the United States is highly problematic, leading to settlements that generate newspaper headlines but not necessarily cultural change. It also runs the risk of privileging a form of enforcement that operates out-side appropriate legal safeguards. The approach canvassed by the British authorities offers only a partial improvement in this process. For negotiated prosecutions to be truly effective, they require a much firmer normative basis.”

4. 4

   Money Laundering

   Crime and Justice (Levi & Reuter)Published Jan 1, 2006Checked Oct 14, 2026

   “Except at an anecdotal level, the effects of this system on laundering methods and prices, or on offenders’ willingness to engage in various crimes, are unknown. Available data weakly suggest that the anti–money laundering (AML) regime has not had major effects in suppressing crimes. The regime does facilitate investigation and prosecution of some criminal participants who would otherwise evade justice, but fewer than expected by advocates of “follow the money” methods. It also permits the readier recovery of funds from core criminals and from financial intermediaries. However, the volume is very slight compared with income or even profits from crime. Though the regime also targets terrorist finances, modern terrorists need little money for their operations. AML controls are unlikely to cut off their funds but may yield useful intelligence. Money‐laundering controls impose costly obligations on businesses and society: they merit better analysis of their effects, both good and bad.”

5. 5

   The money laundering market: An economic analysis.

   Proceedings of the National Academy of Sciences of the United States of America (Ferwerda)Published Aug 10, 2026Checked Oct 14, 2026

   “Criminals launder their proceeds from crime, either themselves or by paying a professional, to disguise the link between the criminal, the crime, and the proceeds. This allows the criminal to spend the proceeds more freely and lowers the chance of receiving unwanted attention from the authorities. This paper investigates the structure and dynamics of the understudied market for money laundering services. The analysis reveals that this illegal market is demand-driven and fragmented, with different forms of laundering, each requiring different steps with varying levels of risk. High search costs, specialized money launderers, and uncertainties lead to local monopolies. Demand tends to be relatively inelastic because criminals eventually need laundering services to spend their proceeds. Local monopolies, inelastic demand, and poor information flows lead to relatively high prices for laundering. Trust issues and two-sided asymmetric information lead to a market with relationships that tend to last longer than generally expected in illegal markets.”