Bank’s historic guilty plea shows focus on US money laundering

For the first time, a US bank has admitted to helping criminal networks in Colombia launder hundreds of millions of dollars in dirty money. This underscores the results of a renewed push to target those supporting money launderers in the region.

TD Bank, NA and TD Bank USA, NA have pleaded guilty to money laundering conspiracy and violating the Bank Secrecy Act (BSA), resulting in a record $1.8 billion in fines but no arrests high-level investigations, the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced on October 10.

For nearly a decade, the bank failed to update its anti-money laundering system to detect suspicious transactions and ignored repeated warnings about these deficiencies. During that time, the bank did not oversee more than $18 trillion worth of activity, allowing three Colombian criminal networks to launder more than $600 million in illicit proceeds, according to court documents.

“TD Bank’s chronic bankruptcies provided fertile ground for a wide range of illegal activities to penetrate our financial system,” said Deputy Treasury Secretary Wally Adeyemo. “We make clear that financial institutions will face serious consequences if they fail to maintain necessary safeguards.”

SEE ALSO: The actions of the US shell company could put a stop to Latin American money launderers

Prosecutors said senior officials working on the bank’s global anti-money laundering operations, senior executives and other members of the bank’s audit committee were all aware of “long-standing, widespread and systemic deficiencies” in its anti-money laundering protocols.

Other lower-level employees were also involved. For example, representatives from financial services and retail banks in Florida and New Jersey helped a money laundering network open accounts and obtain ATM cards that were used to launder money from the United States to Colombia through large cash withdrawals. According to court documents, the employees even helped circumvent internal controls and roadblocks and receive bribes in return.

“We have accepted full responsibility for the failure of our U.S. anti-money laundering efforts [anti-money laundering] “We are executing on our program and making the investments, changes and improvements necessary to meet our commitments,” said Bharat Masrani, group president and chief executive officer of TD Bank Group.

InSight crime analysis

The historic admission by the 10th largest bank in the United States is just the latest in what appears to be an increased focus by the U.S. government not only on fighting money launderers, but also on the financial institutions that enable their illegal activities.

“One of the main reasons for the Bank Secrecy Act is that it can be very difficult to prove that a bank or its employees knowingly accepted dirty or suspicious money and passed it through its channels,” said Scott Greytak, advocacy director for Transparency The US International’s office told InSight Crime.

TD Bank isn’t the only U.S. financial institution coming under fire for helping criminal networks launder their illicit proceeds. In 2012, HSBC Bank and several subsidiaries lost more than $1 billion by failing to adequately monitor hundreds of billions of dollars in bank transfers in countries like Mexico. Most recently, Wells Fargo was penalized in 2022 and 2024 for failing to report questionable transactions and having inadequate internal controls to combat money laundering.

However, TD Bank is the first U.S. bank to plead guilty to money laundering charges, admitting that its employees knowingly accepted dirty money and routed it through the institution.

SEE ALSO: Corruption, crypto test Latin American money laundering laws

The historic agreement comes as the United States implements new anti-money laundering measures. Earlier this year, a regulation known as the “ownership rule” went into effect and aims to improve oversight of shell companies by requiring all U.S. companies to disclose the company’s true owner and control of its resources.

In the TD Bank case, some of the individuals involved used anonymous shell companies to set up fake accounts at the bank and launder millions of dollars. Had the beneficial ownership requirements already been in place, Greytak said, law enforcement could have investigated these suspicious transactions and identified the true owners of the shell companies.

With the new rule, criminal groups must either “break the law by not reporting who actually owns the company, which is a criminal offense, or report this information and lose the cover of such front companies,” he added. “Fortunately, law enforcement can now pierce the corporate veil and know who is behind the operation.”

While the TD Bank settlement represents a historic first, the lack of such appeals and successful cases is a stark reminder of the ongoing lack of funding and institutional support for in-depth financial investigations.

“Even when it comes to the fundamental element of our anti-money laundering framework, the banks themselves, which are at the heart of the genesis of these laws, this framework is only effective if the federal government has sufficient resources and enforcement capacity.” We demand the government and law enforcement to take action against those who do not comply,” Greytak said.

Featured Image: U.S. Attorney General Merrick Garland announces historic settlement with TD Bank. Photo credit: Associated Press.