In a landmark case, TD Bank, one of America's leading financial institutions, has been slapped with a record-breaking fine for its alleged negligence in monitoring money laundering activities.
The bank is set to pay a staggering $1.89 billion to the Department of Justice, $123.5 million to the Federal Reserve Board, and $450 million to the Office of the Comptroller of the Currency, as per the consent order agreed upon between the federal government and the bank. Additionally, the Department of the Treasurys Financial Crimes Enforcement, also known as FinCEN, is set to receive $757 million from the bank.
As reported by Gateway Pundit, the penalty is unprecedented. CNN has reported that the Department of Justice has accused TD Bank of having "long-term, pervasive, and systemic deficiencies." These deficiencies reportedly allowed more than 90 percent of accounts to go unmonitored between January 2018 and April 2024. This oversight allegedly enabled "three money laundering networks to collectively transfer more than $670 million through TD Bank accounts."
Deputy Secretary of the Treasury Wally Adeyemo expressed his concern, stating, "From fentanyl and narcotics trafficking, to terrorist financing and human trafficking, TD Banks chronic failures provided fertile ground for a host of illicit activity to penetrate our financial system." This investigation was initiated following the discovery by federal agents that Chinese criminals had bribed bank employees and laundered millions from selling fentanyl through TD branches in New York and New Jersey, as revealed by the Wall Street Journal.
The consent order further highlighted that the bank had failed to properly implement orders from FinCEN in 2013 after being linked to Ponzi scheme activity. The order stated, "Although the violations involved a host of unique issues, these violations demonstrate key and systemic failures by TD Bank, including awareness of certain issues by senior management."
The bank's alleged negligence in addressing money laundering "caused billions of dollars in illicit funds to flow through the U.S. financial system without effective monitoring." The bank was accused of catering to customers in "high-risk jurisdictions, such as Colombia, Cuba, and China" and then "knowingly failed to timely mitigate the risks stemming from these flows."
The order also criticized the bank's approach to preventing money laundering, stating that the focus was more on limiting the cost of these efforts rather than their effectiveness. The bank "refused to invest in improvements to address such gaps when they were deemed too costly, thus allowing illicit activity to flow through the Bank."
The order further revealed that "funds flowing through TD Bank have been linked to numerous prosecutions, some of which included TD Bank personnel, for various financial crimes that likely could have been prevented, mitigated, or at least timely reported, if TD Bank implemented and maintained an adequate [anti-money laundering] program."
The bank's compliance was described as haphazard, with the order noting that in 2018, the bank had "70,000 backlogged detection alerts and roughly 3,000 aged subpoena responses and further investigation cases." Even when bank officials were aware of problematic accounts, "senior management elected to take no action to correct such issues and instead turned a blind eye to the relevant risks."
The order also accused bank executives of hindering efforts to prosecute financial crimes, as the reports filed to the relevant authorities "were so inaccurate that they were misleading to law enforcement and severely hindered financial crime investigations."
Despite the hefty fines and public scrutiny, the order stated that there are still "outstanding remedial measures" that have not been completed to monitor all transactions. TD Bank will now be under federal supervision for the next four years, a move that underscores the gravity of the situation and the need for stringent oversight in the banking sector.
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