A bank should not be the best friend of drug cartels

Law enforcement has the enormous task of trying to prevent the scourge of illegal drugs from entering and spreading in the United States. From Border Patrol personnel seizing fentanyl at ports of entry, to state, local and federal police and agents arresting smugglers and their opioid poisons, all hands are on deck in the fight against drug trafficking.

Almost all hands.

As reported Thursday, TD Bank will pay $3 billion to settle allegations that it failed to properly monitor money laundering by drug cartels, regulators announced.

The fine includes a $1.3 billion fine to be paid to the U.S. Treasury Department’s Financial Crimes Enforcement Network, a record fine for a bank. TD also plans to pay $1.8 billion to the U.S. Department of Justice and plead guilty to resolve the federal investigation that the bank violated the Bank Secrecy Act and allowed money laundering, according to CNN.

The U.S. Department of Justice said in a statement that TD Bank had “longstanding, pervasive and systemic deficiencies” in its transaction monitoring procedures. The Wall Street Journal first reported the news on Wednesday.

“By tailoring its services to criminals, it became one,” Attorney General Merrick Garland said at a news conference Thursday.

‘Follow the money’ is an important part of detecting and stopping drug trafficking, and it is crucial that banks participate in this.

More than 90% of transactions went unaudited between January 2018 and April 2024, allowing “three money laundering networks to collectively transfer more than $670 million through TD Bank accounts,” according to a legal filing.

“I want to be clear: These systemic failures have not only created hypothetical vulnerabilities, but they have also resulted in actual, material harm to American citizens and communities,” Deputy Treasury Secretary Wally Adeyemo said in a statement. “Time and time again, TD Bank, unlike its peers, prioritized growth and profits over compliance with the law. The bank made the drug trade possible.”

The collective fines of $3 billion are not enough punishment, given the harm caused by enabling traffickers to ply their trade.

The Office of the Comptroller of the Coin said TD processed hundreds of millions of dollars in transactions, clearly indicating highly suspicious activity. And they missed or ignored it.

“This is a difficult chapter in our bank’s history,” TD Bank CEO Bharat Masrani said in a statement. “These failures occurred under my watch as CEO and I apologize to all our stakeholders.”

Does this also apply to people who struggle with addiction or who have lost loved ones to an overdose?

An apology is not enough. The fines are high, but they won’t sink the bank. TD said it has sufficient liquidity to pay the fine and continue operations.

Senator Elizabeth Warren said: “Major banks view government fines as the cost of doing business,” she said in a statement. “This settlement ensures that bad bank executives can go free for allowing TD Bank to be used as a criminal slush fund. ”

It’s not just about getting caught and paying a fine. It is not about apologizing and arranging the finances to deal with the monetary blow. People die, families are destroyed and communities suffer when illegal drugs reach our streets.

Heads must roll.