Banking giant prepares for $3 billion fine for role in massive money laundering scheme: report

A US bank is reportedly setting aside an additional $2.6 billion to pay a hefty fine to regulators.

TD Bank is under investigation amid allegations that Chinese gangs relied on the lender to launder $650 million in illegal drug proceeds between 2016 and 2021.

The bank is now preparing for a full resolution of the matter, Reuters reports, with more than $3 billion set aside in preparation for the upcoming, unannounced fine.

To limit the impact, the bank is selling part of its stake in Charles Schwab.

Earlier this year, reports emerged that TD was in talks with three U.S. regulators, including the Department of Justice (DOJ), over its flawed AML program. In a statement provided to Reuters in May, the bank said its AML checks failed to flag the drug traffickers’ activities. A former employee of the bank is also accused of accepting bribes to facilitate the transactions.

In its latest earnings report, TD said it suffered losses of $181 million in Q3 of this year due to the impact of civil and criminal investigations into its AML program. TD CEO Bharat Masrani said addressing the lender’s AML deficiencies is one of his top priorities.

“We recognize the seriousness of the deficiencies in our U.S. AML program and the work required to meet our obligations and responsibilities is of the utmost importance to me, our senior leaders and our boards of directors.

Our remediation program is well underway. TD has bolstered its U.S. AML program with the addition of globally recognized leaders and talent from across the industry, including experts from regulatory agencies, law enforcement, and government…

TD continues to work constructively with our regulators and law enforcement agencies to resolve our U.S. AML issues and looks forward to providing further clarity to our shareholders, clients and other stakeholders.”

TD expects a global solution to the regulators’ investigations by the end of the year.

TD’s U.S. arm, based in Wilmington, Delaware, manages more than $370 billion in assets and is currently the tenth largest commercial bank in the U.S.

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