TD Bank pleads guilty in money laundering case and will pay $3 billion in fines – NBC 5 Dallas-Fort Worth

• TD Bank pleaded guilty 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 to settle an investigation into its failure to provide oversight stop money laundering by drug cartels.
• TD Bank will also accept restrictions on its growth as part of the settlement.
• The restrictions on TD Bank’s growth would be similar to those the Federal Reserve placed on Wells Fargo in 2018.

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

As part of the deal, TD Bank, whose U.S. unit is the 10th largest U.S. bank by assets, will also face restrictions on its growth imposed by the Office of the Comptroller of the Monet. The total assets of TD Bank’s two U.S. subsidiaries will not exceed $434 billion under this restriction.

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

“By making its services easy for criminals, TD Bank became one,” Attorney General Merrick Garland said Thursday.

“Today, TD Bank also became the largest bank in U.S. history to plead guilty to the failure of the Bank Secrecy Act program, and the first U.S. bank in history to plead guilty to conspiracy to commit money laundering to commit,” Garland said.

“TD Bank chose profit over compliance – a decision that is now costing the bank billions of dollars in fines. Let me be clear: our investigation continues and no individual involved in TD Bank’s illegal conduct is off limits.”

Garland said at a news conference in Washington DC that a regulator would monitor the bank’s anti-money laundering compliance for three years as part of a settlement with the DOJ, which will receive $1.8 billion in connection with the guilty plea of the bank. plea in federal court in Newark, New Jersey.

The attorney general 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 move more than $670 million through accounts at the bank transfer.

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 .” said Attorney General.

Garland read details of electronic messages from reporters showing that bank employees were aware of and concerned about suspicious transactions by one individual, known as David, who personally transferred more than $470 million in illicit funds through TD Bank branches in the United States sluiced.

“In August 2021, a TD Bank store manager emailed another store manager and commented, ‘Y’all really need to shut this down. Lol,'” Garland noted.

“In February 2021, a TD Bank store employee noticed that David’s network had purchased more than $1 million in official bank checks with cash in a single day,” Garland said. “The employee asked, quote: how is that not money laundering of a bank from a back office?”

Another TD Bank employee responded and quoted, ‘Oh, it 100% is,'” Garland said.

Garland said the DOJ expected to file other charges in the case.

When asked if that meant TD Bank executives would be indicted, the attorney general said, “My general answer to questions like this is: We don’t comment on ongoing investigations, but I indicated that we would look into future cases against individuals would expect.”

As part of Thursday’s settlement, TD Bank, the second-largest bank in Canada, will pay $1.3 billion to the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, the largest fine ever imposed by FinCEN, or Treasury to a depository institution.

FinCEN also imposed a four-year independent oversight period on TD Bank to oversee the required cleanup of its practices.

“The vast majority of financial institutions are working with FinCEN to protect the integrity of the U.S. financial system,” said Deputy Treasury Secretary Wally Adeyemo. “TD Bank did the opposite.”

“From fentanyl and narcotics trafficking to terrorist financing and human trafficking, TD Bank’s chronic failures have provided fertile ground for a host of illicit activities to infiltrate our financial system,” Adeyemo 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.

The Federal Reserve Board on Thursday fined TD Bank more than $124 million for violations related to anti-money laundering laws. It said the bank had failed “to implement adequate risk management and supervision of its retail banking operations in the United States, resulting in a U.S. crisis.” subsidiary is being 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 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.

“This is a sad day in our history,” said Bharat Masrani, CEO of TD Bank Group.

“We have taken full responsibility for the failures of our U.S. AML program and are making the investments, changes and improvements necessary to meet our commitments,” Masrani said.

“This is a difficult chapter in the history of our bank. These failures occurred under my watch as CEO and I apologize to all our stakeholders,” Masrani said.

Shares of TD Bank fell more than 5% Thursday afternoon.

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 news development. Check back for updates.