TD Bank to pay $3 billion in money laundering settlement with US: NPR

Attorney General Merrick Garland announces TD Bank will pay about $3 billion in compensation at a news conference Thursday, Oct. 10, 2024, in Washington, after authorities said the financial institution's lax practices caused significant would have made money laundering possible.

Mark Schiefelbein/AP

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Mark Schiefelbein/AP

WASHINGTON – TD Bank will pay about $3 billion as part of a historic settlement with U.S. authorities who said Thursday that the financial institution's lax practices enabled significant money laundering over several years.

Canada-based TD Bank pleaded guilty to conspiracy to launder money, becoming the largest bank in U.S. history to do so, Attorney General Merrick Garland said.

“TD Bank created an environment that allowed financial crime to thrive,” Garland said. “By making her services convenient for criminals, she became one.”

Senior executives were made aware of serious problems with the bank's anti-money laundering program but failed to address them because employees openly joked about how easy it seemed for criminals to launder money there, Garland said.

The bank is the 10th largest in the United States and its CEO said the company takes full responsibility and has cooperated with the investigation. TD Bank Group CEO Bharat Masrani said the company has taken steps to improve its U.S. anti-money laundering program, including appointing new executives and hiring hundreds of new specialists.

“We know the problems, we fix them. As we move forward, we will ensure that something like this never happens again,” Masrani said. “And I am 100% confident that we will get to the other side and come out even stronger.”

The Justice Department said the bank allowed at least three different money laundering networks to transfer a total of $670 million through TD Bank accounts over a period of several years.

According to authorities, the institution became the bank of choice for several criminals and money laundering organizations.

“From fentanyl and drug trafficking to terrorist financing and human trafficking, TD Bank’s chronic bankruptcies provided a breeding ground for a wide range of illegal activities to penetrate our financial system,” said Deputy Treasury Secretary Wally Adeyemo.

In one case, a man transferred more than $470 million in drug proceeds and other illicit funds through TD Bank branches and bribed employees with more than $57,000 in gift cards.

He chose TD Bank because it had the “most permissive policies” and more than once deposited more than $1 million in cash in a single day and then withdrew the money from the bank by check or wire transfer, Garland said. It continued despite staff expressing concern about what he was doing.

There were also piles of cash dumped on bank counters and ATM withdrawals totaling 40 to 50 times the daily limits, said Philip Sellinger, U.S. attorney in New Jersey.

In a separate scheme, five associates worked with criminal organizations to open and maintain accounts that were used to launder $39 million into Colombia, including proceeds from drug deals, Garland said.

There were also several red flags in this case, including that the same Venezuelan passports were used to open multiple accounts, but the bank only realized the problem when one of the employees was arrested.

In a third scheme, a money laundering network had accounts for at least five shell companies that moved more than $100 million in illicit funds, but the bank did not file the required suspicious activity report until law enforcement alerted it.

The bank's “long-term, pervasive and systemic deficiencies” in its policies over a nine-year period allowed such abuses to flourish, prosecutors said.

Two dozen people have been prosecuted for involvement in money laundering schemes, including two TD Bank employees, Garland said. The investigation is ongoing.

The bank also agreed to a major restructuring of the corporate compliance program in its U.S. operations, as well as three years of supervision and five years of probation.