TD Bank has been hit with a massive $3 billion fine and has pleaded guilty to failing in catching money laundering schemes. This all happened because drug cartels and other criminal groups managed to transfer large amounts of illegal money through TD Bank branches in New York and New Jersey. The bank's employees even joked about how easy it was for criminals to use their services. This fine will be split between the Justice Department, banking regulators, and the Treasury Department. TD Bank will also be limited in its expansion plans in the US due to a rare asset cap. Attorney General Merrick Garland said that the bank chose profits over following rules to keep costs down.
The bank failed to monitor over $18 trillion in customer activity for around a decade. This allowed three money laundering networks to funnel illegal money through the bank. The Department of Justice found that TD Bank ignored warnings from high-risk customers and made it too easy for bad actors to operate. Some employees even accepted gift cards as bribes. This is the largest fine ever for a bank breaking the US Bank Secrecy Act. Senator Elizabeth Warren criticized the fine, saying it wasn't enough and that bank executives should face more consequences.
TD Bank's problems were known throughout the company. They have since fired many staff and implemented new compliance programs. The bank is now looking to recover executive pay and has agreed to do this prospectively. Last year, TD Bank paid $1.2 billion to settle a case related to a large Ponzi scheme, but they did not admit any wrongdoing. The current CEO, Bharat Masrani, will retire next year, and the bank has already chosen a new CEO from their Canadian personal banking division.
