TD Bank Fined $3B US

The TD Bank or the Toronto-Dominion Bank has been ordered to pay a total of $3.09 billion US in fines. This was done after pleading guilty to multiple charges. This charges went on to include a lot of conspiracy to violate the Bank Secrecy Act and commit money laundering. The bank has also received a cease-and-desist order. It has also received non-financial sanctions from the Office of the Comptroller of the Currency (OCC). This went on to include an asset cap that can put limits on its growth in the U.S. after it was found that TD Bank had “significant, systemic breakdowns in its transaction monitoring program.”

U.S. Attorney General Merrick Garland said TD created an environment “that allowed financial crime to flourish.” 

“By making its services convenient for criminals, it became one,” he said in a press conference Thursday. “Today, TD Bank became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures, and the first bank in history to plead guilty to conspiracy to commit money laundering.”

He also said that the TD Bank admitted in its plea agreement allowed three money-laundering networks. This was done to transfer more than $670 million US through TD Bank which accounts over a six-year period. Plus, the actions which many employees were aware of, yet went unaddressed. At least one of those schemes involved five TD Bank employees laundering drug proceeds. 

More On The TD Bank…

The sweeping penalties which were announced on Thursday include many consequences that were meted out by several regulators. This on a wide scale, included the OCC and the U.S. Department of Justice (DOJ), with the combined fines adding up to just over $3 billion US. Plus, as part of this, the TD has also agreed to pay more than $1.8 billion US to the DOJ in penalties for criminal charges. 

Bharat Masrani, CEO of TD Group, said in a statement that the bank has “taken full responsibility,” and will be making “the investments, changes and enhancements required to deliver on our commitments.”

“This is a difficult chapter in our bank’s history. These failures took place on my watch as CEO and I apologize to all our stakeholders.”

What Had Happened In The Past?

For many years, TD Bank “willfully” failed to monitor transactions properly. This went on to leave gaping holes that allowed millions of dollars to flow through the bank, the DOJ revealed. 

One money-laundering network “dumped piles of cash on the bank’s counters,” while another another “allegedly withdrew amounts from ATMs 40 to 50 times higher than the daily limit for personal accounts,” U.S. Attorney Philip R. Sellinger for the District of New Jersey said in a statement. 

In another money-laundering scheme, one TD Bank employee, identified as “David,” moved more than $470 million dollars in illicit funds through TD Bank branches in the U.S. This individual, has separately pled guilty to laundering drug proceeds through the bank. It was also found that “TD Bank had the most permissive policies and procedures, and so chose to launder most of his funds there.”

It was even stated that TD Bank’s own internal audit group repeatedly highlighted concerns. This was about the bank’s transaction monitoring program between 2014 and 2022. This was stated according to the DOJ. However, the program remained largely stagnant nonetheless. This highly went onto suffering with chronic underfunding and understaffing.

What Will Happen Now?

The bank has agreed to a major restructuring of their anti-money-laundering program. It has also agreed to restructure three years of monitoring and five years of probation. The implementation of any new programs or services in their U.S. branches will have to go through more stringent approval processes. All of this will happen as ordered by the OCC. 

The asset cap placed on TD Bank by the Office of the Comptroller of the Currency will not apply to any of the bank’s business in Canada or other countries. However, it will curtail growth within the United States. This is where TD is the 10th largest bank. 

Along with that, last month, the bank announced that Raymond Chun would replace Masrani upon his retirement next year. The outgoing chief executive said that he took responsibility for shortcomings that occurred under his watch. He also stated those sentiments on a conference call with investors and media on Thursday.

“We should have done better,” he said on the call. “We know what the issues are, we are fixing them as we move forward. We’re ensuring that this never happens again.”