TD Bank Guilty on Money Laundering Conspiracy in $1.8B Resolution

TD Bank Guilty on Money Laundering Conspiracy in $1.8B Resolution.

TD Bank N.A. and its parent company TD Bank US Holding Company have pleaded guilty and agreed to pay over $1.8 billion in penalties to resolve the investigation over violations of the Bank Secrecy Act (BSA) and money laundering. TD Bank is the first US bank in history to plead guilty to conspiracy to commit money laundering.

TDBNA has pleaded guilty in a conspiracy to neglect the establishment of a compliant anti-money laundering (AML) program as required by the Bank Secrecy Act (BSA), to inaccurately file Currency Transaction Reports (CTRs), and to engage in money laundering activities. Similarly, TDBUSH acknowledged its role in prompting TDBNA's failure to uphold a compliant AML program under the BSA and to submit accurate CTRs.

The Attorney General Merrick Garland stated during a press conference that: "By making its services convenient for criminals, it became one."

Deputy Attorney General Lisa Monaco said: "Today, TD Bank also became the largest bank in U.S. 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. Let me be clear: our investigation continues, and no individual involved in TD Bank’s illegal conduct is off limits."

Between January 2014 and October 2023, court documents reveal that TD Bank exhibited long-standing and systemic shortcomings in its U.S. anti-money laundering (AML) policies, procedures, and controls, yet did not implement suitable corrective measures. Instead, senior management imposed a budgetary constraint known internally as a “flat cost paradigm,” which mandated that the bank's budget remain unchanged year-over-year, even as both profits and risk levels rose significantly during that time. While TD Bank had certain aspects of an AML program that seemed sufficient on the surface, the presence of significant and pervasive deficiencies rendered the institution a vulnerable target for those engaged in financial crime. From 2014 to 2022, TD Bank's transaction monitoring program did not evolve significantly, failing to address recognized deficiencies, emerging money laundering threats, or the introduction of new products and services.

During this period, TD Bank made a deliberate choice not to automatically oversee all domestic automated clearinghouse (ACH) transactions, the majority of check activities, and various other transaction categories. Consequently, 92% of the total transaction volume remained unmonitored from January 1, 2018, to April 12, 2024, which represented an estimated $18.3 trillion in transaction activity. TD Bank's AML failures was described by its employees as "convenient" for criminal activities. These failures allowed three money laundering networks to jointly move over $670 million through TD Bank accounts from 2019 to 2023.

TD Bank's CEO Bharat Masrani said in the statement that: "The anti-money laundering challenges we face took place on my watch as CEO and I take full responsibility."

The US Department of Justice has brought charges against more than twenty individuals involved in these schemes, which includes two insiders from TD Bank. As part of its plea agreement, TD Bank is obligated to maintain its cooperation in the ongoing investigations concerning these individuals. TD Bank has agreed to pay $1.8 billion in penalties.

TD Bank N.A. is the 10th largest bank in the United States and subsidiary of the multinational TD Bank Group. It is a federally chartered bank,  headquartered in Cherry Hill, New Jersey.