TD Bank to Pay $3.1 Billion in Penalties for Anti-Money Laundering Deficiencies
TD Bank has agreed to pay about $3.1 billion in penalties to resolve allegations that its lax adherence to anti-money laundering laws allowed perpetrators of drug and human trafficking and terrorist financing to access the U.S. financial system, the bank, along with DOJ and the Treasury Department, announced Oct. 10.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
As part of the settlement, TD Bank admitted that its AML compliance program failed to meet regulatory requirements, and it agreed to undergo a multiyear independent monitorship to oversee an overhaul of the program, the bank and the agencies said.
“Criminals were able to exploit our systems, and our U.S. AML program did not deliver,” said Leo Salom, TD Bank’s president and CEO. “We are committed to working productively with the monitorship to build a sustainable AML program and meet our obligations under the terms of the resolution.”
For nearly a decade, TD Bank skimped on funding and staffing its AML program to save money and boost its profits, making it an easy target for illicit finance, DOJ said. The bank failed to monitor trillions of dollars in transactions annually for potentially suspicious activity that would require reporting to the Financial Crimes Enforcement Network, and it failed to file suspicious activity reports on thousands of suspicious transactions totaling about $1.5 billion, FinCEN said.
“The vast majority of financial institutions have partnered with FinCEN to protect the integrity of the U.S. financial system. TD Bank did the opposite," Deputy Treasury Secretary Wally Adeyemo said. "From fentanyl and narcotics trafficking, to terrorist financing and human trafficking, TD Bank’s chronic failures provided fertile ground for a host of illicit activity to penetrate our financial system."
Attorney General Merrick Garland said that TD Bank, the 10th largest bank in the United States, is “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.”
Deputy Attorney General Lisa Monaco said the settlement should serve as an important lesson to other banks.
“Every bank compliance official in America should be reviewing today’s charges as a case study of what not to do,” Monaco said. “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.”
DOJ said it has charged more than two dozen people, including two “bank insiders,” in connection with AML schemes at TD Bank and that its investigations of individuals continue.