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TD Bank to Pay $3 Billion in Landmark Money Laundering Settlement with U.S. Authorities
TD Bank has agreed to a historic settlement of approximately $3 billion with U.S. authorities following revelations of severe lapses in its anti-money laundering practices. Announced on Thursday, the settlement marks the largest of its kind in U.S. history, with the Canada-based financial institution pleading guilty to conspiracy to commit money laundering.
Attorney General Merrick Garland emphasized the gravity of the situation, stating, “TD Bank created an environment that allowed financial crime to flourish. By making its services convenient for criminals, it became one.” The investigation revealed that high-level executives were repeatedly made aware of significant issues within the bank’s anti-money laundering program yet failed to address them. Reports indicated that employees openly joked about the ease with which criminals could exploit the system.
As the tenth-largest bank in the United States, TD Bank's CEO, Bharat Masrani, acknowledged the institution’s responsibility, stating, “We know what the issues are; we are fixing them. As we move forward, we’re ensuring that this never happens again.” He assured stakeholders of the bank’s commitment to reform, which includes appointing new leadership and hiring hundreds of specialists to bolster its compliance measures.
The Justice Department's findings revealed that TD Bank allowed at least three distinct money laundering networks to move a staggering total of $670 million through its accounts over several years. “From fentanyl and narcotics trafficking to terrorist financing and human trafficking, TD Bank’s chronic failures provided fertile ground for a host of illicit activity to penetrate our financial system,” remarked Wally Adeyemo, Deputy Secretary of the Treasury.
In one notable case, an individual moved over $470 million in drug-related proceeds and other illegal funds through TD Bank branches, bribing employees with over $57,000 in gift cards. This individual specifically chose TD Bank due to its "most permissive policies," depositing more than $1 million in cash in a single day multiple times and subsequently transferring the funds via checks or wire transfers, all while employees expressed concern over his activities.
U.S. Attorney Philip Sellinger highlighted additional alarming practices, including cash piles left on counters and ATM withdrawals that were 40 to 50 times higher than permitted daily limits. In another scheme, five TD Bank employees collaborated with criminal organizations to open and maintain accounts used to launder $39 million to Colombia, which included drug proceeds. Despite numerous red flags, such as the use of identical Venezuelan passports to open multiple accounts, the bank failed to act until one employee was arrested.
Moreover, a third scheme involved a network operating five shell companies that transferred more than $100 million in illicit funds through TD Bank, which did not file a necessary suspicious activity report until law enforcement intervened.
Prosecutors highlighted the bank’s “long-term, pervasive, and systemic deficiencies” that persisted for nine years, allowing these abuses to proliferate. As part of the settlement, TD Bank has committed to significant restructuring of its corporate compliance program in the U.S., including three years of monitoring and five years of probation.
The investigation has resulted in the prosecution of two dozen individuals linked to various money-laundering schemes, including two employees of TD Bank, with the investigation still ongoing.