TD Bank will pay more than $3 billion to the US in case of money laundering

Canada’s TD Bank has agreed to pay more than $3 billion in fines for failing to adequately monitor money laundering by drug cartels, U.S. officials said Thursday.

TD Bank, the 10th largest bank in the United States, has pleaded guilty to multiple crimes, including violating the Bank Secrecy Act and conspiracy to commit money laundering, Attorney General Merrick Garland said.

“TD Bank created an environment for financial crime to flourish by making its services easy for criminals,” Garland said at a news conference.

“Our anti-money laundering laws dictate that a bank that deliberately fails to protect against criminal schemes is also a criminal,” Garland said. “That’s what TD Bank was.”

The attorney general said TD Bank is the first bank in U.S. history to plead guilty to conspiracy to commit money laundering.

Two TD Bank employees have been charged with involvement in money laundering schemes and other employees are under investigation, Garland said, adding that “no individual involved in TD Bank’s illegal conduct is off limits.”

Between January 2014 and October 2023, TD Bank failed to monitor $18.3 trillion in customer activity, allowing three money laundering networks to transfer more than $670 million through TD Bank accounts, U.S. officials said.

Under the settlement, TD Bank will pay $1.8 billion to the Department of Justice and an additional $1.3 billion assessed by the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

The U.S. Office of the Comptroller of the Coin also imposed a so-called asset limit on the bank, limiting growth in the United States above current asset levels.

TD Bank has approximately 1,100 branches in the United States and 10 million customers. It is the second largest bank in Canada, after the Royal Bank of Canada.

“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 enter our financial system,” said Deputy Treasury Secretary Wally Adeyemo .

The Treasury Department said suspicious activity that was not properly monitored or reported by TD Bank included more than $470 million in transactions involving Da Ying Sze, a New York man who pleaded guilty in 2022 to laundering proceeds from the trafficking of narcotics.

Garland said TD Bank employees were bribed by Sze with more than $57,000 in gift cards and that he deposited more than $1 million in cash on several occasions.

The attorney general recounted a conversation between two TD Bank employees after Sze purchased more than $1 million in official bank checks with cash in one day.

“How is that not money laundering?” one employee asked another.

“Oh, it 100 percent is,” the other employee responded.

TD Bank President and CEO Bharat Masrani apologized and said it was a “difficult chapter in our bank’s history.”

“We have taken full responsibility for the failures of our US anti-money laundering program and are making the investments, changes and improvements necessary to meet our commitments,” Masrani said in a statement.

“These failures occurred under my watch as CEO and I apologize to all our stakeholders,” said Masrani, who announced in September that he would step down next year.

Shares of TD Bank were trading 5.30 percent lower on the New York Stock Exchange on Thursday afternoon.