Oct. 10 (UPI) — TD Bank, the 10th largest bank in the United States, has agreed to pay penalties of more than $3 billion to settle charges of money laundering, the Justice Department announced Thursday.
TD Bank N.A., an American subsidiary of the Toronto-based TD Bank Group, also pleaded guilty to conspiring to fail to maintain an anti-money laundering program that complies with the U.S. Bank Secrecy Act and failing to file accurate Currency Transaction Reports, prosecutors said.
With the plea deal, TD Bank became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures, and the first U.S. bank in history to plead guilty to conspiracy to commit money laundering, Attorney General Merrick Garland said.
The bank will pay $1.8 billion to the Justice Department and $1.3 billion to the Treasury Department’s Financial Crimes Enforcement Network — a record fine for a bank.
The total assets of TD’s two U.S. banking subsidiaries will be capped at $434 billion.
“By making its services convenient for criminals, TD Bank became one,” he said in a statement. “TD Bank chose profits over compliance with the law — a decision that is now costing the bank billions of dollars in penalties. Let me be clear: our investigation continues, and no individual involved in TD Bank’s illegal conduct is off limits.”
The DOJ accused the bank knowing of the risks its lax oversight carried for exploitation by criminals but purposely did nothing about it in order to keep costs down, making it an “easy target” for the “bad guys.”
Because it chose profits and convenience over following U.S. banking laws, TD Bank failed to monitor trillions of dollars of transactions, including those involving ACH transactions, checks, high-risk countries, and peer-to-peer transactions, thus allowing “hundreds of millions of dollars from money laundering networks to flow through the bank,” including for international drug traffickers.
U.S. Attorney Philip R. Sellinger for the District of New Jersey said bank officials were “aware of these risks and failed to take steps to protect against them,” including one instance in which a criminal network “dumped piles of cash on the bank’s counters” while bribing employees with gift cards worth more than $57,000.
“We have taken full responsibility for the failures of our U.S. [anti-money laundering] program and are making the investments, changes and enhancements required to deliver on our commitments,” TD Bank Group CEO Bharat Masrani said in an issued statement. “This is a difficult chapter in our bank’s history. These failures took place on my watch as CEO and I apologize to all our stakeholders.”
The company’s chairman, Alan MacGibbon, acknowledged that money laundering “is a serious global threat, and our U.S. operation did not maintain an adequate AML program to thwart criminal activity.”
The board of directors, he said, “has and continues to take action to address these failures and hold those responsible accountable. We have appointed new leaders across our U.S. operations, overhauled our U.S. AML team, and prioritized investments to drive the required changes.”