WASHINGTON (AP) — TD Bank will pay about $3 billion in a historic settlement with U.S. authorities, who said Thursday that the financial institution’s lax practices enabled money laundering for several years.
Canada-based TD Bank has pleaded guilty to conspiracy to commit money laundering, the largest bank in U.S. history to do so, Attorney General Merrick Garland said.
“TD Bank created an environment where financial crime could flourish,” Garland said. “By making its services easy for criminals, it became one.”
High-level executives were alerted to serious problems with the bank’s anti-money laundering program but failed to resolve them as employees openly joked about how easy it seemed for criminals to launder money there, Garland said.
The bank is the tenth largest in the United States and its CEO said the company is taking full responsibility and is cooperating with the investigation. It has taken steps to overhaul its U.S. anti-money laundering program, including appointing new leadership and adding hundreds of new specialists, said Bharat Masrani, CEO of TD Bank Group.
“We know what the problems are, we solve them. As we move forward, we will ensure this never happens again,” Masrani said. “And I am 100% confident that we will reach the other side and come out even stronger.”
The Justice Department said the bank allowed at least three different money laundering networks to move a total of $670 million through TD Bank accounts over a period of several years.
The institution became the bank of choice for several criminals and money laundering organizations, authorities said.
“From fentanyl and narcotics trafficking to terrorist financing and human trafficking, TD Bank’s chronic failures have provided fertile ground for a host of illicit activities to infiltrate our financial system,” said Deputy Treasury Secretary Wally Adeyemo .
In one case, a man moved more than $470 million in drug proceeds and other illicit funds through TD Bank branches, bribing employees with more than $57,000 in gift cards.
He chose TD Bank because it had the “most lenient policy,” depositing more than $1 million in cash more than once in one day and then withdrawing the money from the bank with checks or wire transfers, Garland said. It continued despite employees expressing concern about what he did.
There were also piles of cash dumped at bank teller windows and ATM withdrawals that totaled 40 to 50 times higher than daily limits, said Philip Sellinger, U.S. attorney in New Jersey.
In a separate scheme, five employees worked with criminal organizations to open and maintain accounts used to launder $39 million to Colombia, including drug proceeds, Garland said.
There were also several red flags in that case, including that the same Venezuelan passports were used to open multiple accounts, but the bank did not identify the problem until one of the employees was arrested.
In a third scheme, a money laundering network had accounts for at least five shell companies that moved more than $100 million in illicit funds, but the bank did not file a required suspicious activity report until police alerted it.
The bank’s “longstanding, pervasive and systemic deficiencies” in its policies over a nine-year period allowed such abuses to flourish, prosecutors said.
Two dozen people have been charged with involvement in money laundering, including two TD Bank employees, Garland said. The investigation is ongoing.
The bank has also agreed to a major restructuring of the corporate compliance program in its US operations, as well as three years of monitoring and five years of probation.
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Associated Press writer Alanna Durkin Richer contributed to this story.
