TD Bank pleads guilty to money laundering, agrees to pay more than $3 billion in fines

WASHINGTON, Oct. 11 — Canada’s TD Bank has agreed to pay more than $3 billion in penalties for failing to adequately monitor money laundering by drug cartels, U.S. officials announced yesterday.

TD Bank, the 10th largest bank in the United States, pleaded guilty to several crimes, including violating the Bank Secrecy Act and conspiring to commit money laundering, Attorney General Merrick Garland said.

“TD Bank has created an environment that has allowed financial crime to thrive by making its services convenient for criminals,” Garland said at a news conference.

“Our anti-money laundering laws state that a bank that deliberately fails to protect itself against criminal schemes is also a criminal,” Garland said.

“That’s what TD Bank was.”

The attorney general said TD Bank was the first bank in U.S. history to plead guilty to conspiracy to commit money laundering.

Two TD Bank employees have been charged with involvement in money laundering schemes and investigations into other employees are ongoing, Garland said, adding that “no one involved in the Bank’s illegal conduct TD is not prohibited.

Between January 2014 and October 2023, TD Bank failed to monitor $18.3 trillion in customer activity, allowing three money laundering rings to transfer more than $670 million through bank accounts TD, U.S. officials said.

Under the terms of the settlement, TD Bank will pay $1.8 billion to the Department of Justice and an additional $1.3 billion assessed by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

The U.S. Office of the Comptroller of the Currency also imposed what is known as an asset cap on the bank, limiting its growth in the United States beyond its current level of assets.

TD Bank has approximately 1,100 branches in the United States and 10 million customers. It is the second largest bank in Canada after the Royal Bank of Canada.

“From fentanyl and narcotics trafficking to terrorist financing and human trafficking, TD Bank’s chronic bankruptcies have provided fertile ground for a host of illicit activities to penetrate our financial system,” said the Deputy Treasury Secretary Wally Adeyemo.

It’s 100 percent

The Treasury Department said suspicious activities that were not properly monitored or reported by TD Bank included more than $470 million in transactions involving Da Ying Sze, a New Yorker who pleaded guilty in 2022 to laundering the proceeds of drug trafficking.

Garland said TD Bank employees were bribed by Sze with more than $57,000 in gift cards and that he made deposits of more than $1 million in cash on multiple occasions.

The attorney general recounted a conversation between two TD Bank employees after Sze purchased more than $1 million in official bank checks with cash in a single day.

“What do you mean it’s not money laundering?” one employee asked another.

“Oh, it’s 100 percent,” the other employee replied.

TD Bank President and CEO Bharat Masrani apologized and said it was a “difficult chapter in our bank’s history.”

“We take full responsibility for the failures of our U.S. (anti-money laundering) program and are making the investments, changes and improvements necessary to meet our commitments,” Masrani said in a statement.

“These failures took place under my watch as CEO and I apologize to all our stakeholders,” said Masrani, who announced in September that he would step down next year.

Shares of TD Bank were trading down 5.30 percent on the New York Stock Exchange Thursday afternoon. -AFP