TD Bank today pleaded guilty and agreed to pay more than $1.8 billion in fines to resolve a Department of Justice investigation into violations of the Bank Secrecy Act (BSA) and noncompliance with anti-money laundering regulations. Separately, the Financial Crimes Enforcement Network fined a New Jersey-based subsidiary of a major Canadian bank $1.3 billion for violations.
At a press conference this afternoon, U.S. Attorney General Merrick Garland announced that TD Bank is the largest bank in U.S. history to plead guilty to violating the Bank Secrecy Act and the first bank in history to plead guilty to money laundering conspiracy. He said there is. “It came together by making that service convenient for criminals,” he says.
A FinCEN statement called the $1.3 billion settlement “the largest fine against a depository financial institution in the history of the U.S. Treasury and FinCEN.” According to a statement from the Department of Justice, TD Bank had “long-term, pervasive, and systemic deficiencies in its U.S. AML policies, procedures, and controls” from January 2014 to October 2023, but did not take “appropriate remedial action.” “They did not take the necessary measures.”
TD Bank’s senior executives have internally implemented a budget mandate known as the “flat cost paradigm,” resulting in TD Bank’s budget remaining year-over-year, despite significant increases in profits and risk profiles over the same period. I requested that it not be increased. Although TD Bank maintained elements of its AML program that appeared adequate on paper, regulators found that fundamental and pervasive flaws in the AML program made TD Bank a “competitive site” for perpetrators of financial crime. He said he had become a target.
As a result, approximately $18.3 trillion in trading activity from January 1, 2018 to April 12, 2024 went unmonitored, according to the statement. These failures became “opportunities” for criminals, with three money laundering networks jointly collecting over $600 million through TD Bank accounts between 2019 and 2023, according to employees cited in a Justice Department statement. We were able to transfer over $70 million. From January 2018 to February 2021, one money laundering network processed more than $470 million through banks through large cash deposits into nominated accounts.
As part of the settlement, TD Bank acknowledged that it knowingly failed to implement and maintain an AML program that met the minimum requirements of the BSA and FinCEN’s implementing regulations, according to a statement from FinCEN. FinCEN said its investigation found that TD Bank was aware of the flaws in its AML program. Among other failures, TD Bank processed transactions on Venmo and Zelle that were “indicative of human trafficking,” and as a result of its deficiencies, it “failed to identify and report these transactions to regulators in a timely manner.” ”.
“The vast majority of financial institutions partner with FinCEN to protect the integrity of the U.S. financial system. TD Bank has done the opposite. From fentanyl and drug trafficking to terrorist financing and human trafficking. Until now, TD Bank’s chronic failures have provided fertile ground for many illegal activities to enter our nation’s financial system,” Deputy Treasury Secretary Wally Adeyemo said in a statement.
