TD Bank has reached a landmark settlement with U.S. authorities, agreeing to pay approximately $3 billion due to allegations of significant money laundering facilitated by the bank's lax practices over multiple years. The Canada-based financial institution has pleaded guilty to conspiracy to commit money laundering, marking the largest bank in U.S. history to do so, according to Attorney General Merrick Garland.
Garland emphasized that TD Bank had fostered an environment conducive to financial crime, allowing it to thrive by providing convenient services for criminals. Despite high-level executives being made aware of serious issues within the bank's anti-money laundering program, corrective actions were not taken, with employees reportedly joking about the ease with which criminals could launder money through the institution.
TD Bank, the 10th largest bank in the United States, has taken full responsibility for the lapses and has been cooperating with the investigation. The bank's CEO, Bharat Masrani, assured that steps are being taken to rectify the anti-money laundering program in the U.S., including appointing new leadership and hiring additional specialists to address the deficiencies.
The Justice Department revealed that TD Bank had allowed at least three money laundering networks to move a total of $670 million through its accounts over several years, making it a preferred choice for criminal organizations engaging in illicit activities such as drug trafficking, terrorist financing, and human trafficking.
One notable case involved a man who funneled over $470 million in drug proceeds and illicit funds through TD Bank branches, exploiting the bank's lenient policies and even bribing employees with gift cards. The bank also failed to flag suspicious activities, such as large cash deposits and withdrawals exceeding daily limits, which were indicative of potential money laundering.
In response to the revelations, TD Bank has committed to a comprehensive restructuring of its corporate compliance program in the U.S., along with undergoing three years of monitoring and five years of probation. The investigation into the money-laundering schemes is ongoing, with two dozen individuals already prosecuted, including bank employees.
The settlement underscores the critical need for financial institutions to uphold stringent anti-money laundering measures to prevent illicit funds from infiltrating the financial system and underscores the consequences of failing to do so.
