TD Bank will pay $3.1 billion in compensation for alleged anti-money laundering violations

TD Bank Processing Overview:

• WHO: TD Bank reportedly agreed to pay nearly $3.1 billion for allowing its networks to be used for money laundering.
• Why: Multiple federal agencies investigated the bank and found serious deficiencies in its anti-money laundering systems.
• Where: TD Bank’s money laundering lawsuit was filed in federal court in New Jersey.

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U.S. authorities reached a nearly $3.1 billion settlement with TD Bank over allegations that the bank failed to prevent its networks from being used to launder money, Law360 reported Oct. 10.

The settlement will resolve several U.S. government money laundering investigations. Under the agreement, TD Bank will pay $3.09 billion in penalties from the U.S. Department of Justice, the Federal Reserve, the Office of the Comptroller of the Currency and the U.S. Treasury Department’s Financial Crimes Enforcement Network.

TD Bank will plead guilty to conspiracy to commit money laundering and violating the Bank Secrecy Act. The bank also agreed to a five-year suspended sentence and four years of independent supervision.

TD Bank’s lawsuit alleges that the bank knew about lapses in its anti-money laundering program

TD Bank’s lawsuit alleges the bank “willfully failed to address persistent, pervasive and known deficiencies” in its anti-money laundering compliance program.

The government accuses the bank of failing to update its transaction monitoring system between 2014 and 2022 despite warnings that the system was outdated and of failing to adequately train employees who acted as the first line of defense against money laundering.

“These failures, among other things, allowed three money laundering networks to launder over $600 million in criminal proceeds through the bank between 2019 and 2023,” TD Bank’s lawsuit says.

Five bank employees also allegedly conspired to open and maintain accounts that were used to launder $39 million into Colombia.

Under the agreement with TD Bank, the Office of the Comptroller of the Currency will set an asset cap for TD Bank’s two U.S. banking units, limiting their growth to a total of $434 billion in assets until it passes its anti-money laundering regulations has improved sufficiently.

“TD Bank created an environment that allowed financial crime to thrive,” U.S. Attorney Merrick Garland said in a press conference. “By making its services convenient for criminals, it has become one.”

According to Garland, TD Bank is the largest bank in the country’s history to plead guilty to violations of the Bank Secrecy Act and the first bank to plead guilty to conspiracy to launder money.

The Consumer Financial Protection Bureau recently hired TD Bank to pay a fine of $28 million for allegedly reporting inaccurate consumer account information to credit reporting agencies.

What do you think of the agreement with TD Bank? Let us know in the comments.

The DOJ is represented by D. Zachary Adams and Chelsea R. Rooney of the Criminal Division’s Money Laundering and Asset Recovery Section and by Mark J. Pesce and Angelica Sinopole of the U.S. Attorney’s Office for the District of New Jersey.

The TD Bank money laundering lawsuit Is United States of America v. TD Bank NACase No. 2:24-cr-00667-ES, in the United States District Court for the District of New Jersey.

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