TD Bank N.A., a major financial institution ranking among the top 10 largest banks in the United States, and its parent company, TD Bank US Holding Company (collectively referred to as TD Bank), have admitted guilt and agreed to a staggering $1.8 billion penalty. This resolution stems from a Justice Department investigation into significant violations of the Bank Secrecy Act (BSA) and failures in preventing money laundering.
In a landmark case, TDBNA pleaded guilty to conspiracy charges, specifically for failing to maintain an adequate anti-money laundering (AML) program as mandated by the BSA, neglecting to file accurate Currency Transaction Reports (CTRs), and engaging in money laundering activities. Simultaneously, TDBUSH pleaded guilty to contributing to TDBNA’s failure to uphold a compliant AML program and to file accurate CTRs.
This guilty plea by TD Bank is part of a coordinated legal action involving multiple regulatory bodies, including the Board of Governors of the Federal Reserve Board (FRB), the Treasury Department’s Office of the Comptroller of the Currency (OCC), and the Financial Crimes Enforcement Network (FinCEN).
Attorney General Merrick B. Garland delivered a strong statement, emphasizing the severity of TD Bank’s misconduct: “By making its services convenient for criminals, TD Bank became one. Today, TD Bank also became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures, and the first US bank in history to plead guilty to conspiracy to commit money laundering. 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.”
Deputy Attorney General Lisa Monaco echoed this sentiment, highlighting the critical importance of compliance within financial institutions: “For years, TD Bank starved its compliance program of the resources needed to obey the law. Today’s historic guilty plea, including the largest penalty ever imposed under the Bank Secrecy Act, offers an unmistakable lesson: crime doesn’t pay — and neither does flouting compliance. Every bank compliance official in America should be reviewing today’s charges as a case study of what not to do. And every bank CEO and board member should be doing the same. Because if the business case for compliance wasn’t clear before — it should be now.”
Principal Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division, pointed out the prolonged nature of the bank’s AML failures: “For nearly a decade, TD Bank failed to update its anti-money laundering compliance program to address known risks. As bank employees acknowledged in internal communications, these failures made the bank an ‘easy target’ for the ‘bad guys.’ These failures also allowed corrupt bank employees to facilitate a criminal network’s laundering of tens of millions of dollars. U.S. financial institutions are the first line of defense against money laundering and illicit finance. When they participate in crime rather than prevent it, we will not hesitate to hold them accountable to the fullest extent of the law.”
U.S. Attorney Philip R. Sellinger for the District of New Jersey further detailed the extent of TD Bank’s oversight failures: “TD Bank prioritized growth and convenience over following its legal obligations. As a result of staggering and pervasive failures in oversight, it willfully failed to monitor trillions of dollars of transactions – including those involving ACH transactions, checks, high-risk countries, and peer-to-peer transactions – which allowed hundreds of millions of dollars from money laundering networks to flow through the bank, including for international drug traffickers. The bank was aware of these risks and failed to take steps to protect against them, including for two networks prosecuted in New Jersey and elsewhere – one that dumped piles of cash on the bank’s counters and another that allegedly withdrew amounts from ATMs 40 to 50 times higher than the daily limit for personal accounts.”
Image: The headquarters of TD Bank, reflecting the serious legal and financial repercussions the institution is facing due to its money laundering failures.
Systemic Failures in AML Compliance
Court documents reveal that from January 2014 to October 2023, TD Bank exhibited long-standing, widespread, and deep-rooted deficiencies in its U.S. AML policies, procedures, and controls. Despite repeated warnings and identified risks, the bank failed to take adequate corrective measures. A central issue was the enforcement of a “flat cost paradigm” by senior executives. This budget mandate prioritized cost control, preventing any year-over-year budget increases, even as TD Bank’s profits and risk exposure significantly grew.
While TD Bank possessed the basic components of an AML program on paper, critical and pervasive flaws rendered it vulnerable to financial crime. For a decade, regulators and TD Bank’s internal audits consistently raised concerns about the transaction monitoring program—a crucial element for detecting and reporting suspicious activities. However, from 2014 to 2022, the transaction monitoring system remained largely unchanged, failing to adapt to known weaknesses, emerging money laundering threats, or the introduction of new banking products and services.
TD Bank consistently underfunded and understaffed its AML compliance operations. Necessary AML projects were repeatedly postponed or canceled in favor of maintaining the “flat cost paradigm” and focusing on “customer experience.” This underinvestment had severe consequences on the bank’s ability to monitor financial transactions effectively.
Image: A visual representation of financial transactions being monitored, highlighting the critical function that TD Bank failed to adequately perform, leading to significant money laundering activities.
Unmonitored Transactions and Criminal Exploitation
A staggering 92% of TD Bank’s total transaction volume went unmonitored between January 1, 2018, and April 12, 2024. This amounted to approximately $18.3 trillion in transactional activity that escaped scrutiny. The bank intentionally avoided automatically monitoring all domestic automated clearinghouse (ACH) transactions, most check activity, and numerous other transaction types. Furthermore, TD Bank did not implement new transaction monitoring scenarios or make substantial updates to existing ones from at least 2014 through late 2022.
The introduction of new services like Zelle was not accompanied by appropriate transaction monitoring coverage. Transactions involving high-risk countries were not meaningfully monitored. In a concerning internal directive, some branches were instructed to cease filing internal unusual transaction reports on certain suspicious customers. Even after deciding to close accounts due to suspicious activity, TD Bank permitted over $5 billion in further transactional activity to occur within these accounts.
TD Bank’s AML deficiencies transformed it into a “convenient” institution for criminals, as acknowledged by its own employees. These failures facilitated three distinct money laundering networks to move over $670 million through TD Bank accounts between 2019 and 2023.
One network alone processed over $470 million between January 2018 and February 2021 through large cash deposits into nominee accounts. Operators of this scheme incentivized bank employees with gift cards worth over $57,000 to ensure the continued processing of their transactions. Despite blatant suspicious activities, including cash deposits exceeding $10,000, TD Bank employees failed to properly identify the conductors of these transactions in required reports.
In a separate scheme from March 2021 to March 2023, a high-risk jewelry business laundered nearly $120 million through shell accounts before TD Bank finally reported the suspicious activity. A third scheme involved money laundering networks depositing funds in the U.S. and rapidly withdrawing them via ATMs in Colombia. Five TD Bank employees colluded with this network, issuing numerous ATM cards to money launderers and participating in the laundering of approximately $39 million.
The Justice Department has brought charges against over two dozen individuals involved in these schemes, including two TD Bank insiders. TD Bank’s plea agreement mandates ongoing cooperation with investigations targeting individuals involved in these criminal activities.
Image: Illustrative image representing a money laundering investigation, symbolizing the legal and investigative actions taken against TD Bank and related criminal networks.
Financial Penalties and Remediation
As part of the plea agreement, TD Bank has agreed to a financial penalty totaling $1,886,945,780.40. This includes a forfeiture of $452,432,302.00 and a criminal fine of $1,434,513,478.40. Furthermore, TD Bank is obligated to engage an independent compliance monitor for three years to oversee and ensure enhancements to its AML compliance program. TD Bank has also reached separate agreements with the FRB, OCC, and FinCEN, with the Justice Department crediting $123.5 million of the forfeiture towards the FRB settlement.
The Justice Department’s resolution with TD Bank considered several factors, notably the severity and widespread nature of the offenses. TD Bank became a preferred bank for multiple money laundering organizations and criminal actors, processing hundreds of millions in illicit funds. While TD Bank did not voluntarily disclose its wrongdoing, it received partial credit for cooperating with the Department’s investigation and initiating remediation of its AML program. However, full cooperation credit was withheld due to the bank’s failure to promptly escalate relevant AML concerns during the investigation. Consequently, the total criminal penalty reflects a 20% reduction based on partial cooperation and remediation efforts.
The investigation was a collaborative effort led by IRS Criminal Investigation, the Federal Deposit Insurance Corporation Office of Inspector General, and the Drug Enforcement Administration, with significant assistance from various law enforcement agencies.
This case is prosecuted by Trial Attorneys D. Zachary Adams and Chelsea R. Rooney of the Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), and Assistant U.S. Attorneys Mark J. Pesce and Angelica Sinopole for the District of New Jersey.
The MLARS’ Bank Integrity Unit, established in 2010, focuses on prosecuting financial institutions and individuals who compromise the integrity of the financial system. To date, the unit has imposed over $25 billion in penalties for violations including BSA, money laundering, and sanctions breaches.
This initiative is part of the Organized Crime Drug Enforcement Task Forces (OCDETF) operation, which targets high-level criminal organizations.
This case serves as a stark reminder of the critical importance of robust AML compliance programs within financial institutions and the severe consequences of prioritizing profit over regulatory obligations.
