TD Bank N.A., the 10th largest bank in the United States, along with its parent company TD Bank US Holding Company, has pleaded guilty and agreed to pay over $1.8 billion in penalties as part of a resolution to the Justice Department’s investigation into violations of the Bank Secrecy Act (BSA) and money laundering.
The bank admitted to failing to maintain a compliant anti-money laundering (AML) program, not filing accurate Currency Transaction Reports (CTRs), and participating in money laundering. The parent company was found responsible for perpetuating these failures.
This settlement involves coordination with several federal agencies, including the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Financial Crimes Enforcement Network.
Attorney General Merrick B. Garland stated that TD Bank had made its services accessible to criminals, marking it as the largest U.S. bank in history to plead guilty to such violations. He emphasized that the investigation is ongoing, indicating that no individuals involved in the bank’s misconduct will be exempt from scrutiny.
Deputy Attorney General Lisa Monaco highlighted that TD Bank’s prior focus on growth over legal compliance has led to this substantial penalty. She urged financial institutions to learn from this case, indicating that neglecting compliance can lead to severe consequences.
Principal Assistant Attorney General Nicole M. Argentieri pointed out that for nearly ten years, TD Bank did not upgrade its AML compliance program to address known risks, which contributed to its vulnerabilities against financial crime.
U.S. Attorney Philip R. Sellinger criticized the bank’s failures in oversight that resulted in trillions of unmonitored transactions, allowing significant illicit activity, including drug trafficking, to occur.
Court documents reveal that from January 2014 to October 2023, TD Bank exhibited long-standing deficiencies in its AML policies, failing to respond adequately despite ongoing concerns raised by regulators.
The investigation discovered that TD Bank did not adequately monitor a vast majority of transactions, resulting in billions of unmonitored activities and facilitating significant money laundering operations.
Under the plea agreement, TD Bank will forfeit over $452 million and pay a criminal fine exceeding $1.4 billion. Additionally, the bank must hire an independent compliance monitor for three years and enhance its AML practices. The Justice Department will credit a portion of the forfeiture towards the resolution with the Federal Reserve Board.
Despite partially cooperating during the investigation, TD Bank did not receive full credit for its actions, leading to the imposed penalties reflecting a 20% reduction due to this partial cooperation.
A multi-agency effort, including the IRS Criminal Investigation, the Federal Deposit Insurance Corporation Office of Inspector General, and other law enforcement agencies, investigated the case. The prosecution was handled by a team from the Justice Department focused on money laundering and asset recovery.