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TD Bank has pleaded guilty to multiple criminal charges, agreeing to pay $3 billion in fines and penalties to the U.S. Department of Justice (DOJ) and financial regulators for failing to monitor and prevent money laundering activities by drug traffickers and other criminal enterprises. This marks one of the most significant enforcement actions in U.S. banking history.
The bank, which ranks as the 10th-largest U.S. bank by assets, also faces growth restrictions imposed by the Office of the Comptroller of the Currency (OCC). Under this limitation, TD Bank’s U.S. subsidiaries are barred from exceeding $434 billion in total assets. This restriction mirrors similar actions taken against Wells Fargo by the Federal Reserve in 2018 for widespread consumer abuses.
“By facilitating criminal activity through its services, TD Bank became complicit in illegal conduct,” said U.S. Attorney General Merrick Garland at a press conference in Washington, D.C. “Today, TD Bank became the largest U.S. bank to plead guilty to Bank Secrecy Act violations and the first to plead guilty to conspiracy to commit money laundering.”
Garland emphasized that TD Bank’s pursuit of profits led to a disregard for legal compliance, resulting in billions of dollars in penalties. He further stated that the DOJ’s investigation is ongoing, and individuals involved in the bank’s illegal conduct remain under scrutiny.
From 2017 to October 2023, TD Bank failed to monitor $18.3 trillion in customer transactions, allowing three major money laundering networks to process over $670 million through its accounts. Garland highlighted that high-level executives, including the bank’s chief anti-money-laundering officer, were aware of the deficiencies in the bank’s compliance program but failed to address them.
One case involved an individual known as “David,” who moved more than $470 million in illicit funds through TD Bank branches. Internal communications revealed that bank employees had expressed concerns about David’s transactions, with one employee stating, “You guys really need to shut this down. Lol,” and another employee confirming, “Oh, it 100% is [money laundering].”
As part of the settlement, TD Bank will pay $1.8 billion to the DOJ, with the remaining $1.3 billion going to the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). This represents the largest penalty FinCEN has ever imposed on a financial institution. The bank will also face a four-year independent monitorship to oversee remediation of its anti-money-laundering practices.
Deputy Treasury Secretary Wally Adeyemo condemned the bank’s failures, stating, “TD Bank’s chronic compliance lapses created an environment that allowed illicit activities like narcotics trafficking, terrorist financing, and human trafficking to infiltrate our financial system.”
The Federal Reserve also fined TD Bank $124 million for its failure to adequately oversee its U.S. operations, which resulted in laundering hundreds of millions of dollars in illicit proceeds.
This guilty plea follows previous actions against TD Bank, including a $28 million penalty issued in September by the Consumer Financial Protection Bureau (CFPB) for providing inaccurate information to consumer reporting agencies and delaying corrections for over a year.
TD Bank’s CEO, Bharat Masrani, acknowledged the bank’s failures, stating, “This is a difficult chapter in our bank’s history, and we take full responsibility for the breakdown of our anti-money-laundering program. I apologize to all our stakeholders.”
Following the announcement, TD Bank’s shares dropped by over 5% as the bank continues to grapple with the fallout from this significant legal and regulatory breach.
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