TD Bank to pay $3B, face growth cap over money laundering violations
Toronto-Dominion Bank, commonly referred to as TD Bank, pled guilty Thursday to violating federal anti-money laundering and bank transparency laws, agreeing to pay more than $3 billion and limit its future growth.
TD Bank, which is based in Canada, will pay billions of dollars in criminals fines and penalties to several federal agencies, including the Federal Reserve and Office of the Comptroller of the Currency, federal officials announced.
TD Bank allegedly failed to adequately oversee its retail banking operations, which allowed a subsidiary to be used to launder hundreds of millions of dollars through drug trafficking.
The bank allegedly failed to monitor $18.3 trillion in customer activity over a six-year period, allowing three money laundering networks to move millions of dollars through its accounts.
"TD Bank created an environment that allowed financial crimes to flourish. By making its services convenient for criminals, it became one,” Attorney General Merrick Garland said at a press conference Thursday afternoon.
The DOJ is also prosecuting two dozen individuals for their involvement in money-laundering schemes that moved more than $670 million in illegal funds through TD Bank accounts. Two TD employees were charged.
“Our laws dictate that the narcotics traffickers who flood our communities with deadly drugs cannot use American financial institutions to move their money. And our anti-money laundering laws dictate that a bank that willfully fails to protect against criminal schemes is also a criminal. That is what TD Bank was," Garland added.
One scheme moved more than $470 million through TD Bank branches in the U.S. and bribed TD bank employees with more than $57,000 in gift cards. Garland described the illegal conduct as “obvious to say the least.”
In another scheme, five TD employees worked with criminal organizations to open accounts that were used to launder $39 million to Colombia, including drug proceeds.
“Despite significant internal red flags, the bank did not identify that its own employees were conspiring to launder tens of millions of dollars to Colombia until law enforcement arrested them,” the attorney general said.
Some 92 percent of TD Bank's transactions went unmonitored between January 2018 and April 2024, according to the DOJ.
The bank is the largest in U.S. history to plead guilty to charges under the Bank Secrecy Act and the first to plead guilty to conspiracy to commit money laundering, Garland said. The penalty levied against TD is the largest ever under the Bank Secrecy Act.
TD Bank's penalty is also the largest paid by a bank since federal regulators slapped Wells Fargo with a $1 billion fine in 2018 in what became one of the biggest banking scandals since the 2007-08 financial crisis and recession.
Wells Fargo has also been subject to an asset cap since February 2018, which has prevented the bank from growing beyond $1.95 trillion. TD Bank will be subject to a similar limit, which could seriously impair the bank's ability to compete with rivals.
Despite the steep fine and unprecedented penalties, the DOJ and OCC faced immediate pushback from one prominent bank critic for not hitting TD Bank harder.
"$3B seems like a lot, but to big banks like @TDBank_US, it's just the cost of doing business," wrote Sen. Elizabeth Warren (D-Mass.) on X.
"This settlement lets bank executives off the hook for allowing TD to be used as a criminal slush fund. @TheJusticeDept & @USOCC must do better in enforcing anti-money laundering laws."
Warren has been one of Washington's top critics of the banking industry and the federal agencies responsible for overseeing them. She has repeatedly called for federal bank regulators to break up Wells Fargo and blasted Fed Chair Jerome Powell for not taking stronger steps to rein in banks.
Updated at 2:15 p.m.
Date: |
Topics
-
Business - Financial Times
TD Bank to pay $3bn in US case over money laundering lapses
Prosecutors say Canadian lender failed to remedy ‘long-term, pervasive and systemic deficiencies’ because of cost controls1 hour ago -
Business - Financial Times
Reeves weighs capital gains tax hike to help plug UK’s Budget gap
Treasury models impact of changes, but rules out ‘exit tax’ on those who leave Britain to avoid being hit2 hours ago -
World - Financial Times
Lebanon’s battered bonds defy deepening conflict to stage rally
Traders speculate that weaker Hizbollah is the first step to resolving long-running default4 hours ago -
Top stories - The New York Times
TD Bank Pleads Guilty and Pays $3 Billion to Settle Money-Laundering Case
Authorities cited joking by bank employees about crimes: “‘You guys really need to shut this down LOL.’”19 minutes ago -
Business - CNBC
TD Bank pleads guilty in money laundering case, will pay $3 billion in penalties
The Department of Justice reportedly was investigating how drug traffickers used TD Bank to launder money derived from fentanyl sales in the U.S.2 hours ago -
Top stories - NBC News
TD Bank pleads guilty in money laundering case, will pay $3 billion in penalties
TD Bank pleaded guilty Thursday to multiple criminal charges and agreed to pay a whopping $3 billion in fines and other penalties to the Department of Justice and financial regulators for failing ...2 hours ago -
Top stories - CBS News
TD Bank to pay $3 billion after breaking U.S. money laundering rules
TD Bank allowed money laundering networks to move more than $670 million through its accounts between 2019 and 2023, Justice Department said.2 hours ago -
Business - MarketWatch
TD Bank fined $3 billion by U.S. regulators and forced to limit growth
Toronto-Dominion Bank shares fell on Thursday as the Canadian bank was fined and forced to limit expansion to settle charges it failed to prevent money laundering.1 hour ago
More from The Hill
-
Politics - The Hill
Trump tells Detroit he'll make car loan interest tax-deductible
Former President Trump on Thursday laid out his pitch to strengthen the auto industry in an economic address in Detroit, proposing to make interest on car loans fully tax deductible, pledging to ...42 minutes ago - Donald Trump -
Politics - The Hill
US approves temporary imports of IV fluids as hospitals grapple with storm-related shortages
Federal health officials have approved the import of certain IV fluids from overseas as hospitals across the country scramble to deal with a Hurricane Helene-inflicted shortage. The shortage ...47 minutes ago -
Politics - The Hill
Trump swipes at Detroit during speech in Motor City
Former President Trump on Thursday bashed the city of Detroit as a “mess” and called it a developing area during a speech in the Motor City. The former president spoke at the Detroit Economic Club, ...1 hour ago - Donald Trump -
Politics - The Hill
OpenAI sees continued attempts to use AI models for election interference
OpenAI has seen continued attempts by cybercriminals to use its artificial intelligence (AI) models for fake content aimed at interfering with this year’s elections, the ChatGPT maker said in a new ...1 hour ago -
Politics - The Hill
Whoopi Goldberg on Trump 'stupid View' remarks: 'How dumb are you?
"The View" co-host Whoopi Goldberg slammed former President Trump after he called the talk show "stupid" and then suggested that she's "really dumb." “As I watch that stupid 'View,' where you have ...1 hour ago - Donald Trump