TD Bank Pleads Guilty and Faces $3 Billion Penalty for Massive Money Laundering Scandal

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TD Bank, Canada's second-largest bank, with about 1,100 branches in the U.S., has pleaded guilty to money-laundering charges and agreed to pay approximately $3 billion in fines to U.S. authorities. This is the largest penalty imposed on a bank for violating anti-money laundering laws. 

The scale of the bank's guilty plea is staggering. A federal investigation revealed that for over a decade, employees facilitated criminal activities by allowing people to open accounts and conduct large cash transactions, including a Queens man who laundered over $470 million through the bank in exchange for bribes. As part of the settlement, TD Bank will face an "asset cap," preventing it from growing beyond its current size of about $370 billion in assets. 

Attorney General Merrick Garland announced Thursday that TD Bank will pay a $3 billion settlement.Photo byMark Schiefelbein/AP

Federal prosecutors said the Canadian bank made it "convenient" for criminals to open accounts, transfer funds, and even deposit seven-figure sums of cash at its branches. Such behavior was somewhat of an open secret inside the bank, apparently. "How is that not money laundering?" one branch employee reportedly asked another after a customer was permitted to buy more than $1 million in bank checks with cash. Documents showed that a branch manager emailed a colleague, "You guys really need to shut this down, LOL." They didn't. The bank's monitoring of transactions was so porous, prosecutors said, that from 2018 through April this year, it did not adequately monitor about $18.3 trillion in activity.

Federal authorities underscored the severity of TD Bank's systemic issues, which resulted from the bank's prioritization of growth over regulatory compliance. Since last year, TD Bank has been under scrutiny for its anti-money-laundering compliance, raising concerns among the public and regulatory bodies. Additionally, TD Bank has previously dealt with other regulatory issues, including a $1.2 billion settlement related to a Ponzi scheme and abandoning a $13.4 billion acquisition due to regulatory hurdles.