On 10 October 2024, the DoJ, FRB, OCC and FinCEN announced a coordinated resolution against TD Bank that saw it agree to pay around USD 3.09 billion in fines and forfeiture, as well as an asset cap imposing growth restrictions. The regulators found that TD Bank had long-term, pervasive, and systemic problems in its AML controls, policies, and procedures, but failed to take timely or appropriate remedial action. Although TD Bank maintained elements of an AML programme that appeared adequate on paper, fundamental and widespread flaws in the programme made TD Bank an “easy target” for perpetrators of financial crime.
TD Bank became the first US bank to plead guilty to conspiracy to commit money laundering and received the largest penalty ever imposed under the US Bank Secrecy Act (BSA). Its US retail banking division pleaded guilty to conspiring to fail to maintain a compliant AML programme, to fail to file accurate currency transaction reports (CTRs), and to launder money.
As early as 2012, TD Bank personnel knew its AML programme had problems. In 2013, the bank was fined by FinCEN and the OCC for failing to file suspicious activity reports (SARs) on a Ponzi scheme. Over the next 11 years, TD Bank ignored repeated warnings from regulators, internal audits, third party consultants and its own employees regarding issues with its transaction monitoring programme. This included:
- Backlogs and delays investigating suspicious activity, submitting SARs and closing accounts marked as suspicious
- Inadequate customer due diligence (CDD)
- Outdated software and technology
- A lack of essential transaction monitoring scenarios
- Inexpert and untrained staff, including senior executives
The primary driver for the deficiencies was that TD Bank prioritised growth, the customer experience, and keeping costs down over its compliance requirements. The deliberate underinvestment in its AML compliance for nearly a decade hamstrung the programme’s effectiveness. As a result, TD Bank was left with millions of high-risk customers whilst the bank was screening less than 1 out of every 10 transactions.
Criminals used TD Bank accounts to launder millions of dollars associated with fentanyl smuggling, terrorist financing and human trafficking, among others, sometimes colluding with corrupt TD employees. As of 10 October 2024, investigations into two TD Bank employees remained ongoing whilst others had already been prosecuted. The DoJ declined to comment on whether it would bring charges against senior TD Bank executives but stated that it did expect to see more prosecutions.
