TD Bank, one of Canada’s largest financial institutions, has agreed to pay $3 billion in fines after pleading guilty to charges of facilitating money laundering in the United States.
The settlement, reached with US authorities on Thursday, marks one of the largest penalties ever imposed on a bank for failing to comply with anti-money-laundering laws. Federal prosecutors accused TD Bank of allowing criminals to open accounts, transfer large sums, and deposit millions in cash without adequate scrutiny.
The charges stem from a decade-long failure by TD Bank to maintain sufficient anti-money-laundering safeguards. Court documents revealed that some employees took bribes and turned a blind eye to suspicious activities, making TD Bank a “convenient” choice for criminals. In one case, a man convicted of several crimes gave bank workers $57,000 in gift cards to facilitate the laundering of $470 million. Some employees were aware of the illegal activities, even joking about the need to “shut this down.”
TD Bank’s leniency in its compliance measures allowed $670 million to be laundered through its accounts by criminal networks between 2019 and 2023. In response, the bank will now face strict penalties, including an asset cap, which prevents it from growing beyond its current size of approximately $370 billion in assets.
The settlement includes payments to the US Department of Justice, the Treasury’s Financial Crimes Enforcement Network, and other regulatory bodies. This case is part of a broader crackdown by US authorities to hold banks accountable for facilitating financial crimes. TD Bank’s CEO, Bharat Masrani, acknowledged the bank’s failure and pledged to overhaul its anti-money-laundering program.
The penalty caps a period of intense scrutiny for TD Bank, following several other high-profile regulatory issues, including the abandonment of a $13.4 billion acquisition deal last year due to regulatory concerns. The bank has since taken steps to improve its oversight, spending hundreds of millions of dollars on compliance measures and hiring additional staff to address its internal shortcomings.
While TD Bank cooperated with the investigation, the consequences of the scandal are expected to reverberate within the banking industry, as calls for stricter enforcement of anti-money-laundering laws continue to grow.
The New York Times, the Hill, and BBC contributed to this report.
