TD Bank pleads guilty to enabling money laundering for the benefit of criminal organizations – NMP

Today, banks and various lenders across the country must tread carefully and prioritize profits over compliance.

TD Bank made history last Thursday when it became the largest bank in the United States to plead guilty to violations of the Bank Secrecy Act (BSA) and conspiracy to commit money laundering, allowing traffickers to drugs and other criminals to open accounts and transfer money through the bank. . The bank and its parent TD Bank US Holding Company agreed to pay more than $3 billion in fines to resolve the charges.

TD Bank, the 10th largest bank in the United States and the second largest in Canada, failed to maintain a BSA-compliant anti-money laundering (AML) program and failed to file reports of accurate foreign exchange transactions (CTR), according to the Bureau. Public Affairs press release.

By failing to do so, Department of Justice (DOJ) officials said they fined the bank for each day it failed to comply with the BSA between 2014 and 2023, totaling $1 $.4 billion fine.

The bank also owes a record $1.3 billion to the Treasury Department’s Financial Crimes Enforcement Network, $450 million to the OCC and another $123.5 million to the Federal Reserve. The bank had already set aside $3 billion to cover the fines.

“We will make the necessary changes to put the bank on a stronger foundation,” new CEO Ray Chun told investors in a conference call Thursday. “This is TD’s number one priority and my number one priority. Make no mistake, we will meet our commitments to our regulators…we will get the job done.”

The U.S. Department of Justice and banking regulators have issued a scathing indictment against TD Bank that involves moving money for drug cartels and criminal organizations. Justice Department briefing document says TD bankruptcies created vulnerabilities that allowed five bank store employees to open and maintain accounts for one of the money laundering rings . In doing so, the employees allowed the criminals to launder $39 million in Colombia.

“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 enter our financial system,” said Deputy Treasury Secretary Wally Adeyemo.

The Justice Department said the bank allowed at least three different money laundering rings to move a total of $670 million through TD Bank accounts since 2014.

“TD Bank chose profits over compliance in order to keep its costs low,” U.S. Attorney General Merrick Garland said at Thursday’s news conference. “TD Bank created an environment that allowed financial crime to thrive. By making his services practical for criminals, he became one.

Authorities said TD Bank’s problems were “known at all levels” of the bank and that they did not report any suspicious activity until law enforcement paid attention. Sometimes bank tellers accepted gift cards as bribes.

Garland also told reporters that bank employees “openly joked” about lack of compliance on several occasions, and that at least two employees had accepted bribes, officials said.

The plea agreement includes a rare imposition of an asset cap — a “worst case scenario,” Lemar Persaud, an analyst at Cormark Securities, said before the deal was announced. The plea agreement also includes other business limitations due to multiple government investigations into what authorities described as pervasive problems.

Wells Fargo saw its profits limited by a $1.95 trillion asset cap in 2018, following a fake accounts scandal. An asset cap would also limit TD’s profits, but to a lesser extent than for Wells Fargo, Persaud said.