Canada’s Toronto Dominion Bank must pay out over $3 billion to regulators to settle charges levied against it after failing to properly monitor money laundering schemes by drug cartels in the United States.
It was announced on Thursday that within the fine, a whopping $1.3 billion penalty will be paid to the US Treasury Department’s Financial Crimes Enforcement Network, marking a record fine for a bank.
The remaining $1.8 billion will be paid to the US Justice Department.
“By making its services convenient for criminals, TD Bank became one,” said Attorney General Merrick B. Garland during a press conference on Thursday.
TD Bank pleaded guilty hoping to resolve the US government’s investigation that the bank violated the Bank Secrecy Act and permitted money laundering.
“Today, TD Bank also became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures, and the first US bank in history to plead guilty to conspiracy to commit money laundering,” continued Garland.
“TD Bank chose profits over compliance with the law — a decision that is now costing the bank billions of dollars in penalties. Let me be clear: our investigation continues, and no individual involved in TD Bank’s illegal conduct is off limits.”
According to a statement from the US Department of Justice, TD Bank had “long-term, pervasive, and systemic deficiencies” in how it was monitoring transactions.
Between January 2018 and April 2024, over 90% of transactions at TD Bank went unmonitored, which “enabled three money laundering networks to collectively transfer more than $670 million through TD Bank accounts,” reads a legal filing.
“I want to be clear, these systemic failures did not just create hypothetical vulnerabilities, but they resulted in actual, material harm to American citizens and communities,” said Deputy Treasury Secretary Wally Adeyemo in a statement.
“Time and again, unlike its peers, TD Bank prioritized growth and profit over complying with the law. The bank enabled drug trafficking.”
The Department of Justice referenced an instance where TD Bank employees collected over $57,000 worth of gift cards to process over $470 million in cash deposits from a money laundering network to “ensure employees would continue to process their transactions.”
The Office of the Comptroller of the Currency, the US agency responsible for regulating banks, also weighed in on the situation, accusing TD Bank of processing hundreds of millions of dollars in transactions that were clearly linked to nefarious activity.
TD Bank CEO Bharat Masrani called the situation a “difficult chapter” in the bank’s history in a recent statement, apologizing to stakeholders that “these failures took place on my watch as CEO.”
“We have taken full responsibility for the failures of our US [anti-money laundering] program and are making the investments, changes and enhancements required to deliver on our commitments,” said Masrani.
The bank has responded by pledging to bolster its anti-money laundering surveillance efforts, including hiring of over 700 new specialists with “experience and qualifications in money laundering prevention, financial crimes, and AML remediation.”
TD said it hopes the additional employees will “better prevent, detect and measure financial crime risk.”
However, the bank will remain under the watch of the US Financial Crimes Enforcement Network for the next four years, which will closely monitor their transactions.
TD Bank was also forced to pay out $1.2 billion to settle a lawsuit last year over its involvement in a $7 billion Ponzi scheme spearheaded by disgraced financier Allen Stanford.
The money was distributed among the victims of the scheme, however, the bank itself denied any wrongdoing.
