The tenth largest bank in the United States and its parent company will pay $3 billion to settle charges that it failed to properly monitor money laundering by drug cartels. TD Bank N.A. (TDBNA) pleaded guilty to conspiring to fail to maintain an anti-laundering (AML) program that complies with the BSA, fail to file accurate Currency Transaction Reports, and launder money.
Court documents reveal that TD Bank’s lax monitoring made it “convenient” for criminals, allowing three major money-laundering networks to funnel more than $670 million through the bank between 2019 and 2023.
“By making its services convenient for criminals, TD Bank became one,” said Attorney General Merrick B. Garland in a press release. “Today, TD Bank also became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures, and the first US bank in history to plead guilty to conspiracy to commit money laundering. TD Bank chose profits over compliance with the law — a decision that is now costing the bank billions of dollars in penalties.”
According to court documents, between January 2014 and October 2023, TD Bank ignored pervasive deficiencies in its AML policies and failed to address growing risks, despite significant profit increases. Senior executives enforced a strict budget policy, known internally as a “flat cost paradigm,” which kept the bank’s AML budget flat year after year, even as the bank’s risk profile grew.
“For nearly a decade, TD Bank failed to update its anti-money laundering compliance program to address known risks. As bank employees acknowledged in internal communications, these failures made the bank an ‘easy target’ for the ‘bad guys.’ These failures also allowed corrupt bank employees to facilitate a criminal network’s laundering of tens of millions of dollars,” said Principal Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “U.S. financial institutions are the first line of defense against money laundering and illicit finance. When they participate in crime rather than prevent it, we will not hesitate to hold them accountable to the fullest extent of the law.”