TD Bank pleads guilty in money laundering case and will pay $3 billion in fines

TD Bank pleaded guilty Thursday in a criminal money laundering case and agreed to pay as much as $3 billion in fines and other penalties to the Justice Department and federal financial regulators for failing to monitor money laundering by drug cartels.

As part of the deal, TD Bank, whose U.S. unit is the 10th-largest U.S. bank by assets, is accepting limits on its growth, the Office of the Comptroller of the Monet announced Thursday.

Attorney General Merrick Garland said a regulator will monitor the bank’s compliance with anti-money laundering prevention practices for three years as part of a settlement.

Garland said that over a six-year period ending last October, TD Bank failed to monitor a staggering $18.3 trillion in customer activity, allowing three money laundering networks to transfer more than $670 million through accounts at the bank.

At least one of these schemes involved five bank employees, Garland said.

“At various times, high-level executives, including the person who became the bank’s Chief Anti-Money Laundering Officer, knew that there were serious problems with the bank’s anti-money laundering program, but the bank failed to correct them” , the attorney general said. said.

The Wall Street Journal reported in May that the DOJ is investigating how Chinese organized crime groups and drug traffickers used TD Bank to launder money from the sale of the deadly opiate fentanyl in the United States.

“TD Bank’s continued prioritization of growth over controls enabled its employees to break the law and facilitate the laundering of hundreds of millions of dollars. The bank’s blatant failure in risk management attracted illicit actors and is egregious and unacceptable,” Acting Comptroller of the Currency Michael Hsu said in a statement.

The restrictions on TD Bank’s growth are similar to those the Federal Reserve imposed on Wells Fargo in 2018 over what the Fed called “widespread consumer abuse” at that bank.

The Federal Reserve Board on Thursday fined TD Bank more than $124 million for violations related to anti-money laundering laws, saying the bank failed “to adequately manage risk and supervise its retail banking operations in the United States, resulting in a U.S. subsidiary used to launder hundreds of millions of dollars in illicit proceeds.”

Sen. Elizabeth Warren, D-Mass., rejected Thursday’s deal in a statement to CNBC.

“Big banks view government fines as the cost of doing business,” Warren said.

“This settlement ensures that bad bank executives can go free for allowing TD Bank to be used as a criminal slush fund. The Department of Justice and the Office of the Comptroller of the Monetary Fund must do a better job enforcing our anti-money laundering laws,” Warren said.

Shares of TD Bank fell more than 3% Thursday afternoon.

A spokeswoman for Toronto-based TD Bank, Canada’s second-largest bank, had no immediate comment.

In September, TD Bank was ordered by the Consumer Financial Protection Bureau to pay nearly $28 million for repeatedly providing consumer reporting agencies with customer information containing numerous errors, and waiting more than a year to fix those errors, despite them were aware of it.

This is a development story. Check back for updates.