TD Bank, one of Canada’s largest banks, has agreed to pay over $3 billion and admitted to criminal charges in the U.S. The bank allowed drug cartels and other criminals to move hundreds of millions of dollars through its accounts without proper checks.
What Happened?
For almost 10 years, TD Bank didn’t have strong enough systems in place to prevent money laundering. Even when employees reported suspicious activity, like a customer making $1 million cash deposits every day, the bank didn’t take action. Now, the bank faces the biggest fine ever for breaking anti-money laundering laws in the U.S.
TD Bank Admits Its Mistakes
TD Bank’s CEO, Bharat Masrani, said the bank takes full responsibility for its failures. He apologized to customers and employees, saying these issues happened during his time as CEO. He also said the bank is financially strong enough to handle the fines and is working to fix the problems.
TD Bank has already started making changes, like hiring 700 new staff members to focus on preventing money laundering. Masrani, who has been CEO for 10 years, will retire in April 2025.
Biggest Guilty Plea in U.S. History
TD Bank is the largest bank in U.S. history to plead guilty to breaking money laundering laws. The bank’s U.S. operations are now restricted from growing until they prove they’ve fixed their compliance issues.
U.S. Attorney General Merrick Garland said TD Bank made it easy for criminals to use its services, essentially becoming part of the crime. The investigation is ongoing, and more people may face charges.
How Did It Happen?
By 2018, TD Bank was failing to monitor more than 90% of its transactions, which added up to over $18 trillion. Inside the bank, employees even joked that their slogan, “America’s Most Convenient Bank,” was more convenient for criminals.
One customer used TD Bank to move over $470 million in drug money, even bribing employees with gift cards to look the other way. Another scheme involved five bank employees helping to transfer $39 million to Colombia using ATM cards.
What’s Next?
TD Bank will pay $1.8 billion to the U.S. Department of Justice and $1.3 billion to the Treasury’s Financial Crimes Enforcement Network, along with other fines. The bank will also be monitored by an outside group to make sure it improves its practices.
TD Bank serves over 27.5 million customers around the world. These fines and penalties are a major step in the bank’s effort to rebuild its reputation and fix its mistakes.
