TD Bank pleads guilty in DOJ money laundering case
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U.S. Attorney General Merrick Garland speaks about a guilty plea by TD Bank during a press conference today. Photo: SAUL LOEB/AFP via Getty Images
TD Bank has agreed to pay more than $3 billion in federal penalties in connection with an admission that it failed to prevent money laundering, including by drug traffickers, and a massive Ponzi scheme.
Why it matters: TD Bank is the 10th largest bank in the U.S. with some $367 billion in assets as of Dec. 31, as well as 27,000 employees and more than 1,100 branches.
Driving the news: The bank pleaded guilty Thursday to multiple charges, including "conspiring to fail to maintain an anti-money laundering (AML) program," the Department of Justice said.
- As part of a resolution with federal regulators, the company agreed to implement needed enhancements to its anti-money-laundering systems and processes.
- It will also accept a federal monitor and more stringent approval processes for new products, services and markets.
- And it agreed to cap total assets at its U.S. banks at $434 billion, though that figure does not include TD Securities.
Zoom in: The failures led to significant issues, including the facilitation of transactions in a massive Ponzi scheme, according to FinCEN, the financial crimes enforcement arm of the Treasury Department.
- From January 2018 through April 2024, the bank "intentionally did not automatically monitor" numerous transactions totaling about $18.3 trillion, according to the DOJ.
- It also "failed to meaningfully monitor transactions involving high-risk countries" and "instructed stores to stop filing internal unusual transaction reports on certain suspicious customers," the DOJ said.
What they're saying: TD Bank said it has "taken full responsibility for the failures" of its U.S. anti-money-laundering program, and is making the investments and changes required to implement new systems.
- TD Bank CEO Leo Salom apologized to stakeholders, and acknowledged that "criminals were able to exploit our systems and our U.S. AML program did not deliver."
Threat level: The deposit cap will hurt TD Bank's growth prospects in the U.S., but the bank said it "has the financial strength, stability, and operational flexibility to deliver the required U.S. AML remediation program, continue to serve the financial needs of its more than ten million U.S. customers, and invest to strengthen the business."
