On Thursday, October 10th, TD Bank agreed to pay a $3 billion settlement after pleading guilty to facilitating extensive money laundering activities. The settlement, the largest of its kind, was reached with the United States Department of Justice and the Treasury Department after it was revealed that the bank had allowed over $670 million to flow through its accounts via three separate money laundering networks. The case highlights systemic failures within TD Bank’s anti-money laundering (AML) program, dating back several years.
U.S. Attorney General Merrick Garland stated that TD Bank had created an environment where financial crime thrived, making it a favored bank for criminals. Garland emphasized the severity of the bank’s failures, which allowed illicit funds linked to drug cartels, human trafficking, and terrorist activities to be laundered undetected. The lax oversight enabled some clients to deposit millions of dollars in a single day, far exceeding normal cash transaction limits.
According to Deputy Treasury Secretary Wally Adeyemo, TD Bank’s negligence extended to over 90% of its transactions between 2018 and 2024. The $3 billion settlement includes $1.3 billion paid to the Financial Crimes Enforcement Network and $1.8 billion to the Department of Justice. The settlement also imposes a five-year probation period and three years of close monitoring to ensure compliance.
TD Bank’s CEO Bharat Masrani acknowledged the bank’s shortcomings, issuing an apology and promising reforms to prevent future violations. The bank has since hired over 700 AML specialists and implemented stricter compliance protocols. Despite the fine, the bank assured investors that it has sufficient liquidity to continue operations, though its U.S. expansion plans have been hindered.
This marks the second major settlement for TD Bank, which also paid $1.2 billion last year for its involvement in a $7 billion Ponzi scheme. The ongoing scrutiny and stringent penalties indicate a growing effort by U.S. authorities to crack down on financial institutions enabling criminal activities.
