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TD Bank pleaded guilty and agreed to pay a penalty over money-laundering violations to the Department of Justice (DOJ), and announced a settlement with the Department of Treasury’s Financial Crimes Enforcement Network (FinCEN), leaving the bank on the hook for more than $3 billion.
The bank agreed to pay a nearly $1.9 billion penalty to the DOJ and a record $1.3 billion fine to FinCEN, according to news releases from the agencies. The bank also reached resolutions with the Federal Reserve Board, the Office of the Comptroller of the Currency, and the US Attorney’s Office for the District of New Jersey.
“As part of the settlement, TD Bank admits that it willfully failed to implement and maintain an anti-money laundering (AML) program that met the minimum requirements” set by the Bank Secrecy Act, according to FinCEN. It also agreed to four years of independent monitoring of its “required remediation.”
“By making its services convenient for criminals, TD Bank became one,” Attorney General Merrick Garland said in the DOJ release. “Today, TD Bank also became the largest bank in US 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. TD Bank chose profits over compliance with the law—a decision that is now costing the bank billions of dollars in penalties.”
Garland added that “our investigation continues, and no individual involved in TD Bank’s illegal conduct is off limits.”
Andrea Gacki, director of FinCEN, said in the agency’s release that for more than a decade, the bank “allowed its AML program to languish making TD Bank a target for illicit actors—including its own employees.”
“We have taken full responsibility for the failures of our US AML program and are making the investments, changes and enhancements required to deliver on our commitments,” Bharat Masrani, group president and CEO of TD Bank Group, said in a news release. “This is a difficult chapter in our Bank’s history. These failures took place on my watch as CEO and I apologize to all our stakeholders.”
FinCEN noted in its release that its “investigation revealed that TD Bank knew that its AML program was neither appropriately designed nor adequately resourced to mitigate the actual illicit finance risks that it faced on multiple fronts. Among other failures, TD Bank’s processing of peer-to-peer transactions…including transactions indicative of human trafficking, was insufficient,” and the bank didn’t report them to the agency in a timely manner. It also allowed “significant backlogs” of suspicious activity to pile up.
FinCEN specifically noted an incident from 2021 when a bank employee helped launder money from narcotics sales “in exchange for bribes. This employee opened numerous accounts, including for shell companies, that then engaged in millions of dollars’ worth of funnel account activity in a high-risk jurisdiction where TD Bank maintained no operations.”