TD Bank to Pay $3 Billion in Record Settlement for Money Laundering Violations

TD Bank, Canada’s second-largest bank and a major player in the U.S. financial system, has agreed to pay a record-breaking $3 billion settlement with the U.S. Department of Justice (DOJ) to resolve allegations of widespread money laundering violations. The settlement, announced on Thursday, represents the largest penalty ever imposed on a bank for failing to prevent money laundering.

As part of the settlement, TD Bank admitted to criminal charges of conspiracy to commit money laundering, making it the largest U.S. bank ever to plead guilty to such charges. The DOJ accused the bank of creating an environment that allowed “financial crime to flourish” due to its inadequate anti-money laundering controls and oversight.

“TD Bank’s long-standing and systemic deficiencies in its policies and practices made it easy for criminal networks to exploit the bank’s systems and move vast sums of illicit funds,” stated Attorney General Merrick Garland.

The DOJ alleged that TD Bank’s failures enabled money laundering networks to funnel hundreds of millions of dollars through the bank’s accounts over several years. In some cases, bank employees were directly involved in helping criminals launder money. The DOJ cited instances where large sums of cash were deposited without proper scrutiny and ATM withdrawals far exceeded daily limits.

The bank’s CEO, Bharat Masrani, has acknowledged the severity of the bank’s failures and expressed remorse. “This is a difficult chapter in our bank’s history,” Masrani stated. “We take full responsibility for these shortcomings and are committed to addressing them to prevent future occurrences.”

Key Takeaways:

• TD Bank has agreed to pay a record $3 billion settlement to resolve money laundering charges.
• The bank has admitted to criminal charges, becoming the largest U.S. bank to plead guilty to conspiracy to commit money laundering.
• The DOJ accused TD Bank of creating an environment that facilitated financial crime due to inadequate anti-money laundering controls.

This landmark settlement highlights the increasing scrutiny of banks’ anti-money laundering practices and the severe consequences of failing to prevent financial crime. It underscores the importance of robust compliance programs, effective oversight, and a culture of compliance within financial institutions to maintain the integrity of the financial system and prevent criminal activity.