Toronto Dominion (TD) Bank pleaded guilty on Thursday to criminal charges for failing to prevent money laundering by drug cartels involved in selling deadly fentanyl in the U.S. As part of the settlement with the Department of Justice (DOJ), TD Bank will pay $3 billion in fines and penalties.
Now the tenth-largest U.S. bank, TD Bank, which expanded from Canada, also agreed to limits on its future growth, capping its total U.S. assets at $434 billion, according to CNBC. The plea deal requires the bank to be under close monitoring for the next three years to ensure compliance with anti-money laundering (AML) regulations.
Attorney General Merrick Garland stated that TD Bank ignored $18.3 trillion in customer transactions over a six-year period, allowing three money laundering networks to funnel $670 million through the bank’s accounts. Alarmingly, some TD employees were directly involved in at least one of these operations. High-ranking executives, including the bank’s chief anti-money laundering officer, were aware of the shortcomings but failed to act, Garland revealed.
“We expect future prosecutions,” Garland said when asked whether additional cases would target TD Bank executives. The DOJ investigation also found that organized crime in China used TD Bank to launder proceeds from U.S. fentanyl sales.
In addition to the DOJ fines, TD Bank will pay $1.3 billion to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN)—the largest fine ever imposed on a U.S. financial institution. Deputy Treasury Secretary Wally Adeyemo criticized the bank’s lack of compliance, stating, “TD Bank did the opposite” of protecting the financial system from abuse.
TD’s failures contributed to money laundering for narcotics trafficking, terrorism, and human trafficking. These violations have led to growth restrictions similar to those imposed on Wells Fargo following its consumer abuse scandal. The Federal Reserve also fined TD more than $124 million for inadequate risk management.
TD Bank Group CEO Bharat Masrani acknowledged the bank’s failures, apologizing to stakeholders and pledging to make the necessary changes. “This is a difficult chapter in our Bank’s history,” Masrani said, accepting responsibility for the shortcomings under his leadership.
