In a significant legal development, Toronto-Dominion Bank (TD Bank) has been fined $3.09 billion after pleading guilty to conspiracy to violate the Bank Secrecy Act and commit money laundering. This penalty, announced by U.S. Attorney General Merrick Garland, is the largest fine ever imposed under the Bank Secrecy Act [831f004f]. The bank's failures allowed three money-laundering networks to transfer over $670 million through its accounts over a six-year period, raising serious concerns about its compliance with anti-money laundering regulations [831f004f].
The settlement includes a cease-and-desist order and an asset cap that limits TD Bank's growth in the U.S. market, where approximately 25% of its revenue is generated [831f004f]. CEO Bharat Masrani has publicly taken responsibility for the bank's shortcomings, acknowledging the serious implications of the bank's oversight [831f004f].
As part of the settlement, TD Bank will pay $1.3 billion to the Financial Crimes Enforcement Network and $1.8 billion to the Department of Justice [d482cc3c]. Notably, over 90% of transactions were unmonitored from January 2018 to April 2024, which facilitated the transfer of illicit funds [d482cc3c]. Furthermore, investigations revealed that employees accepted over $57,000 in bribes to overlook suspicious transactions [d482cc3c].
The bank will undergo external monitoring for three years to ensure compliance with financial regulations [831f004f]. The ongoing investigations into five TD employees involved in laundering drug proceeds indicate that the repercussions of this case extend beyond financial penalties [831f004f]. This case underscores the increasing scrutiny that financial institutions face regarding their anti-money laundering practices, particularly as the U.S. government intensifies efforts against drug cartels, especially concerning fentanyl trafficking [d482cc3c].