TD Bank pleads guilty and will pay a $3 billion fine

TD Bank pleaded guilty Thursday to multiple criminal charges and agreed to pay a whopping $3 billion in fines and other penalties to the Justice Department and financial regulators for failing to monitor money laundering by drug traffickers and other criminals.

As part of the deal, growth restrictions will also be imposed by the Office of the Comptroller of the Currency on TD Bank, whose U.S. division is the 10th largest American bank by assets. The total assets of TD Bank's two U.S. banking subsidiaries cannot exceed $434 billion under this restriction.

The restrictions are similar to those of the Federal Reserve Wells Fargo in 2018 about what the Federal Reserve called “widespread consumer abuse” at that bank.

“By making its services convenient for criminals, TD Bank has become one,” Attorney General Merrick Garland said Thursday.

“Today, TD Bank also becomes the largest bank in U.S. history to plead guilty to violations of the Bank Secrecy Act program and the first U.S. bank in history to plead guilty to conspiracy to commit money laundering,” Garland said.

“TD Bank prioritized profits over compliance with the law – a decision that is now costing the bank billions of dollars in penalties. Let me be clear: Our investigation continues and no individual involved in TD Bank’s illegal conduct is off limits.”

Garland said at a news conference in Washington, D.C. that a monitor would monitor the bank's compliance with anti-money laundering practices for three years as part of a settlement with the DOJ in connection with the bank's culprits of $1.8 billion -Dollar receives plea deal in federal court in Newark, New Jersey.

The attorney general said that over a six-year period ending last October, TD Bank admittedly failed to monitor an impressive $18.3 trillion in customer activity, allowing three money laundering networks to steal more than $670 million -Transfer dollars through accounts at the bank.

At least one of those schemes involved five bank employees, Garland said.

“At various times, senior executives, including the person appointed as the bank's chief anti-money laundering officer, knew that there were serious problems with the bank's anti-money laundering program, but the bank failed to address them “said the Attorney General said.

Garland read to reporters details of electronic messages that showed bank officials' awareness and concern about suspicious transactions involving an individual named David, who personally moved more than $470 million in illicit funds through TD Bank branches across the United States.

“In August 2021, a TD Bank branch manager sent an email to another branch manager and remarked, quote, 'You guys really need to close this. Lol,'” Garland remarked.

“In February 2021, a TD Bank branch employee saw that David’s network had purchased more than $1 million in official bank checks with cash in a single day,” Garland said. “The employee asked, quote: How can a bank not launder money from a back office?”

Another TD Bank employee responded, “Oh, that’s 100% true,” Garland said.

Garland said the DOJ expects to pursue additional prosecutions in the case.

Asked whether this would mean charges against TD Bank executives, the attorney general said: “My general response to these types of questions is that we do not comment on ongoing investigations, but I have indicated that we may engage in proceedings in the future.” would count against individuals.”

As part of Thursday's settlement, TD Bank, Canada's second-largest bank, will pay $1.3 billion to the Treasury Department's Finacial Crimes Enforcement Network, the largest such penalty ever imposed on a depository institution by FinCEN or the Treasury Department became.

FinCEN also imposed a four-year independent monitoring role on TD Bank to oversee the necessary correction of its practices.

“The vast majority of financial institutions have partnered with FinCEN to protect the integrity of the U.S. financial system,” said Deputy Treasury Secretary Wally Adeyemo. “TD Bank did the opposite.”

“From fentanyl and drug trafficking to terrorist financing and human trafficking, TD Bank’s chronic failures provided fertile ground for a variety of illegal activities to penetrate our financial system,” Adeymo said.

The Wall Street Journal reported in May that the Justice Department was investigating how Chinese organized crime groups and drug traffickers used TD Bank to launder money from sales of the deadly opiate fentanyl in the United States.

The Federal Reserve Board on Thursday fined TD Bank more than $124 million for violations of anti-money laundering laws, saying the bank failed to “provide adequate risk management and oversight of its retail banking operations.” in the United States, which led to the establishment of a US subsidiary”. are used to launder hundreds of millions of dollars in illegal proceeds.

Sen. Elizabeth Warren, D-Mass., criticized Thursday's deal in a statement to CNBC.

“Big banks view government fines as a cost of doing business,” Warren said.

“This settlement exonerates bad bank managers for allowing TD Bank to be used as a dark money fund for criminals. The Department of Justice and the Office of the Comptroller of the Currency must do a better job enforcing our anti-money laundering laws,” Warren said.

In a statement, TD Bank Group CEO Bharat Masrani said: “We have accepted full responsibility for the failure of our US AML program and are making the investments, changes and improvements necessary to meet our commitments.”

“This is a difficult chapter in the history of our bank. These failures occurred under my watch as CEO and I apologize to all our stakeholders,” Masrani said.

TD Bank shares were down more than 5% on Thursday afternoon.

In September, TD Bank was ordered to pay nearly $28 million by the Consumer Financial Protection Bureau for repeatedly providing consumer reporting agencies with information about customers that contained numerous errors and waiting more than a year to fix those errors , even though she knew about it.

This is developing news. Check back for updates.