TD Bank will pay $1.8 billion to settle charges with the federal government; pleads guilty to money laundering conspiracy

TD Bank NA and its parent company TD Bank US Holding Company today pleaded guilty to federal charges of violating the Bank Secrecy Act and money laundering. TD Bank has several branches in Westchester and Fairfield.

TD Bank has agreed to pay $1.8 billion in penalties to settle accusations that it failed to file accurate reports on currency transactions and laundered money. The parent company pleaded guilty to preventing the bank from having a program that complied with federal requirements and failing to file accurate transaction reports.

“By making its services more convenient for criminals, TD Bank has become one,” said U.S. Attorney General Merrick B. Garland. “Today, TD Bank also became the largest bank in U.S. history to plead guilty to the failures of the Bank Secrecy Act program, and the first U.S. bank in history to plead guilty to conspiracy to commit to commit money laundering.”

Garland said TD chose profits over compliance with the law and said that decision is now costing it in the form of penalties. Garland added that the Justice Department’s investigation continues.

“As is the case with all corporate criminal matters, no one involved in TD Bank’s illegal conduct will be off the hook. We will follow the evidence wherever it leads,” Garland said. “Federal anti-money laundering laws are designed to prevent criminals from using America’s banks to fuel their crimes. Our laws dictate that drug traffickers who flood our communities with deadly drugs cannot use America’s financial institutions to move their money. And our anti-money laundering laws state that a bank that deliberately fails to protect itself against criminal schemes is also a criminal. This is what TD Bank was, as it failed to maintain an adequate anti-money laundering program between January 2014 and October 2023.”

According to court documents, between January 2014 and October 2023, TD Bank had long-term, widespread and systemic deficiencies in its anti-money laundering (AML) policies, procedures and controls in the United States, but did not not taken appropriate corrective action.

The Justice Department said TD Bank intentionally failed to automatically monitor all domestic automated clearing house (ACH) transactions, most check activity and many other types of transactions, resulting in result that 92% of total transaction volume was unmonitored between January 1, 2018 and April. 12, 2024. This represented approximately $18.3 trillion in transaction activity. TD Bank also has not added any new transaction monitoring scenarios and has not made any material changes to existing transaction monitoring scenarios from at least 2014 through the end of 2022, according to the Department of Justice.

The Justice Department said three money laundering rings collectively moved more than $670 million through TD Bank accounts between 2019 and 2023.

Between January 2018 and February 2021, a money laundering ring processed more than $470 million through the bank via large cash deposits. Banks are required by federal law to report cash deposits of $10,000 or more. The Justice Department said operators of this system provided bank employees with gift cards worth more than $57,000 to ensure employees would continue to process their transactions. And even though the operators of this scheme were clearly depositing cash well in excess of $10,000 in suspicious transactions, TD Bank employees did not identify the perpetrator of the transaction in required reporting.

In a second scheme between March 2021 and March 2023, a high-risk jewelry company transferred nearly $120 million through fictitious accounts before TD Bank reported the activity.

In a third scheme, money laundering networks deposited funds in the United States and quickly withdrew them using ATMs in Colombia. According to the Department of Justice, five TD Bank employees conspired with this network and issued dozens of ATM cards to money launderers, ultimately conspiring to launder approximately $39 million. The Justice Department has charged more than two dozen people in connection with the schemes, including two banking industry insiders. TD Bank’s plea agreement requires continued cooperation in ongoing investigations of the individuals.

The Justice Department said TD failed to meaningfully monitor transactions involving high-risk countries; asked its branch staff to stop filing internal “unusual transaction” reports on certain suspicious customers; and allowed more than $5 billion in transactional activity to occur in accounts even after the bank decided to close them.

In a statement, TD said it recognized and took full responsibility for the failures of the U.S. anti-money laundering program. It said “significant efforts” were underway to address its U.S. anti-money laundering program to meet its obligations and that it was working closely with regulators and authorities and supporting efforts to to bring money launderers to justice.