TD Bank to pay $3.1B settlement over alleged anti-money laundering violations

TD Bank settlement overview:

• Who: TD Bank reportedly agreed to pay nearly $3.1 billion over allegations that it allowed its networks to be used for money laundering.
• Why: Multiple federal agencies investigated the bank and found serious deficiencies in its anti-money laundering systems.
• Where: The TD bank money laundering lawsuit was filed in New Jersey federal court.

United States authorities reached a nearly $3.1 billion TD Bank settlement over allegations the bank failed to prevent its networks from being used to launder money, Law360 reported Oct. 10.

The settlement will resolve multiple money laundering investigations by the U.S. government. Under the agreement, TD Bank will pay $3.09 billion in penalties from the U.S. Department of Justice, the Federal Reserve, the Office of the Comptroller of the Currency and the U.S. Treasury Department’s Financial Crimes Enforcement Network.

TD Bank will plead guilty to felony charges of conspiring to commit money laundering and violating the Bank Secrecy Act. The bank also agreed to five years of probation and four years of independent monitoring.

TD Bank lawsuit alleged bank knew about anti-money laundering program failings

The TD Bank lawsuit alleges the bank “willfully failed to remediate persistent, pervasive and known deficiencies” in its anti-money laundering compliance program.

The government alleges the bank failed to update its transaction monitoring system between 2014 and 2022 despite warnings the system was outdated and failed to adequately train employees who acted as the first line of defense against money laundering.

“These failures enabled, among other things, three money laundering networks to launder over $600 million in criminal proceeds through the bank between 2019 and 2023,” the TD Bank lawsuit says.

Five bank employees also allegedly conspired to open and maintain accounts used to launder $39 million to Colombia.

Per the TD Bank settlement, the Office of the Comptroller of the Currency will place an asset cap on TD Bank’s two U.S. banking units, limiting their growth to $434 billion in total assets until it sufficiently remediates its anti-money laundering compliance.

“TD Bank created an environment that allowed financial crime to flourish,” U.S. Attorney Merrick Garland said in a press conference. “By making its services convenient for criminals, it became one.”

Garland says TD Bank is the largest bank in the country’s history to plead guilty to Bank Secrecy Act violations and the first bank to plead guilty to conspiracy to commit money laundering.

The Consumer Financial Protection Bureau recently ordered TD Bank to pay a $28 million fine for allegedly reporting inaccurate information about consumer accounts to credit reporting agencies.

What do you think about the TD Bank settlement? Let us know in the comments.

The DOJ is represented by D. Zachary Adams and Chelsea R. Rooney of the Criminal Division’s Money Laundering and Asset Recovery Section and by Mark J. Pesce and Angelica Sinopole of the U.S. Attorney’s Office for the District of New Jersey.

The TD Bank money laundering lawsuit is United States of America v. TD Bank NA, Case No. 2:24-cr-00667-ES, in the U.S. District Court for the District of New Jersey.

Read About More Class Action Lawsuits & Class Action Settlements:

• Bank of America class action alleges bank made misleading statements about Merrill Lynch cash sweep program
• AmEx class action claims co. prevents businesses from encouraging other card use
• Wells Fargo, arbitration association collude on unfair process, class action claims
• Associated Bank renews partnership with Green Bay Packers amid TCA NSF fees investigation