(10 October 2024 – United States) TD Bank has agreed to pay $3 billion in penalties after pleading guilty to violating US anti-money laundering federal laws.
According to court documents, between 2014 and 2023, TD Bank had “long-term, pervasive, and systemic deficiencies” in its US AML policies, procedures, and controls but failed to take appropriate remedial action.
“By making its services convenient for criminals, TD Bank became one,” says Attorney General Merrick Garland.
For a decade, regulators and the bank’s own internal audit group repeatedly identified concerns about its transaction monitoring programme, yet the programme remained “effectively static,” says the DoJ.
This meant the bank intentionally did not automatically monitor all domestic ACH transactions, most cheque activity, and numerous other payment types. Some 92% of total transaction volume – $18.3 trillion – went unmonitored from January 2018 to April 2024. The firm made no effort to put in appropriate monitoring even when rolling out new products such as the Zelle P2P service.
The DoJ says that three money laundering networks managed to collectively transfer more than $670 million through TD Bank accounts between 2019 and 2023. Between January 2018 and February 2021, one network processed more than $470 million through the bank through large cash deposits into nominee accounts. The operators of this scheme provided employees gift cards worth more than $57,000 to ensure they would continue to process their transactions.
The penalties include $1.8 billion to the US Justice Department, with the rest coming from banking regulators and the Treasury Department’s Financial Crimes Enforcement Network. In addition, the bank will retain an independent compliance monitor for three years.
Says Garland: “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.”
TD Bank CEO Bharat Masrani says: “We have taken full responsibility for the failures of our US programme and are making the investments, changes and enhancements required to deliver on our commitments.”
“These failures took place on my watch as CEO and I apologise to all our stakeholders.”