
TD Bank, one of Canada’s largest financial institutions, has agreed to pay over $3 billion in penalties and pleaded guilty to criminal charges in the US for enabling drug cartels and criminals to transfer hundreds of millions in illicit funds. The bank admitted to failing to prevent money laundering activities, despite numerous warnings from staff.
Prosecutors highlighted that TD Bank had inadequate safeguards in place for nearly a decade. These failures allowed suspicious activities to go unchecked, such as a customer depositing $1 million in cash daily. The penalties imposed on the bank are the largest ever under anti-money laundering laws in US history.
Bharat Masrani, TD Bank’s CEO, accepted responsibility for these failures and apologized to the bank’s stakeholders, stating the institution would invest heavily in strengthening its compliance programs. The bank has already taken steps to overhaul its anti-money laundering operations, hiring over 700 new specialized staff to address the issue.
“This is a difficult chapter in our bank’s history, and I apologize to all our stakeholders,” Masrani said. He also announced his retirement, scheduled for April 2025, marking the end of his decade-long tenure at TD Bank.
The US Justice Department noted that TD Bank is the first bank to plead guilty to conspiracy to commit money laundering under the Bank Secrecy Act. As a result of this settlement, TD Bank’s growth in the US will be restricted, a severe measure typically reserved for extreme cases of wrongdoing. US Attorney General Merrick Garland emphasized that the bank’s cooperation with the investigation was key to the case, and further prosecutions of individuals are expected.
The investigation revealed that the bank had failed to monitor over 90% of transactions on its network by 2018, amounting to more than $18 trillion in unchecked activity. One customer laundered over $470 million in drug proceeds through TD Bank accounts, bribing employees with gift cards. Another scheme involved bank staff facilitating the transfer of $39 million in illicit funds to Colombia using ATM cards.
The settlement includes $1.8 billion in penalties to the Justice Department and $1.3 billion to the Treasury’s Financial Crimes Enforcement Network, along with additional payments to other regulatory bodies. TD Bank, the sixth largest in North America by assets, will also undergo external monitoring as part of the agreement.
Shares of TD Bank fell by more than 5% following the news.