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TD Bank pleads guilty in $1.8B resolution over money laundering violations

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Thursday, November 28, 2024

TD Bank pleads guilty in $1.8B resolution over money laundering violations

Attorneys & Judges
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Lisa O. Monaco Deputy Attorney General | Official Website

Principal Deputy Assistant Attorney General Nicole M. Argentieri announced that TD Bank has entered a guilty plea for violations of the Bank Secrecy Act and involvement in money laundering conspiracy. This development comes as part of a $1.8 billion resolution with the U.S. Department of Justice.

Argentieri highlighted that TD Bank, recognized as the 10th largest retail bank in the United States, had placed profits above compliance for over a decade by adopting a "flat cost paradigm" which restricted spending on its anti-money laundering (AML) compliance program despite rising risks.

The bank was aware of systemic deficiencies in its AML program, including an outdated transaction monitoring system that remained unchanged for ten years, ignoring warnings from regulators and employees alike. Employees within the AML department even joked about how these failures made TD an "easy target" for bad actors.

Three significant money laundering networks exploited these vulnerabilities to launder more than $670 million through TD Bank. In one case, five bank insiders facilitated these activities by opening accounts and providing ATM cards used to withdraw funds overseas after deposits were made in the United States. These insiders received kickbacks using debit cards issued to the laundering organization.

TD Bank's guilty plea includes charges of both violating the Bank Secrecy Act and engaging in money laundering due to inadequate internal controls allowing such schemes. Argentieri emphasized that this resolution is meant to convey a clear message to banks about their role as primary defenders against financial crimes.

Following the discovery of misconduct during investigations, TD Bank cooperated with authorities by identifying further infractions and supplying critical evidence such as video surveillance footage. The bank also took steps to hold employees accountable financially by reclaiming bonuses from executives, including its CEO, which led to a reduction in fines imposed on them.

In response to these issues, TD has begun reforming its compliance practices by committing to enhancements and agreeing to retain an independent compliance monitor who will ensure adherence to agreed reforms under close supervision from authorities.

Argentieri acknowledged contributions from trial attorneys at the Money Laundering and Asset Recovery Section’s Bank Integrity Unit along with partners in New Jersey District law enforcement agencies like IRS-Criminal Investigation among others before handing over proceedings to U.S Attorney Philip Sellinger.

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