TD Bank is the 10th largest bank in the country, and at one time was a top choice for criminal organizations laundering drug money, according to federal prosecutors.
The bank's $3 billion plea deal shocked the financial world, with one U.S. senator accusing the Justice Department of “absurd legal gymnastics” that had gone soft on executives.
For years, the bank has prioritized increasing profits without investing in essential safeguards to prevent cartels and other organized crime groups from using its systems to launder money. They were able to shuffle (in some cases) $671 million in confidential transfers that should have been flagged and reported to the authorities. According to the plea agreement, with the cooperation of corrupt bank officials.
Attorney General Merrick Garland announced the bank's guilty plea in October, telling reporters, “By making its services convenient for criminals, TD Bank has become one with criminals.” .
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April 18, 2018 at TD Waterhouse Bank in New York City. (St. Petersburg)
“TD Bank also became the largest bank in U.S. history to plead guilty to failing Bank Secrecy Act programs, and the first U.S. bank in history to plead guilty to money laundering conspiracy,” he added. “TD Bank chose profit over compliance with the law. This decision has now cost the bank billions of dollars in penalties.”
At the time, he said the investigation was ongoing and warned that further charges were possible.
In another case, Da Yin Shi, 45, of New York, who was admitted to international money laundering, gave a bank employee approximately $60,000 in gift cards. He pleaded guilty in his own case to conspiracy to launder $653 million for criminals in the United States, China and Hong Kong.
Some of it was drug money. Federal prosecutors say $470 million went through TD Bank.
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Read charging details document:
According to court documents, the bank failed to comply with anti-money laundering regulations that require it to flag suspicious transactions for about 10 years, from January 2014 to October 2023. Bank officials saved money by leaving outdated anti-money laundering programs in place instead of updating their systems to accommodate emerging technology.
Federal prosecutors say the anti-money laundering program was known to management but was so ineffective that employees joked it was in place.
“These failures, among other things, enabled three money laundering networks to launder more than $600 million in criminal proceeds through banks between 2019 and 2023,” federal prosecutors said in court documents. It is written down. “These failures also created vulnerabilities that allowed five bank store employees to open and maintain one account in the money laundering network.”
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These five corrupt employees helped the criminal organization launder $39 million into Colombia through nearly 200,000 ATM withdrawals.
Despite huge corporate fines and an “asset cap” that imposes strict restrictions on banks, Sen. Elizabeth Warren, D-Mass., has accused the Justice Department of engaging in “legal gymnastics” to free top executives. denounced.
Attorney General Merrick Garland speaks during a press conference at the Department of Justice in Washington, September 24, 2024. (AP Photo/Mark Schiefelbein)
In an open letter to Garland, he said, “The way the Justice Department structured the plea agreement makes TD Bank subject to any penalties Congress has enacted against banks that engage in criminal money laundering.” I guarantee you won't face it.”
“These shocking failures allowed three separate money laundering syndicates to launder more than $670 million through banks between 2019 and 2023,” she continued. “The magnitude of the value of these illegal transactions is only dwarfed by the obviousness of the criminal activity.”
In total, the criminal organization laundered more than $670 million, authorities said, and total fines were set at $3 billion.
He argued that banks could write off billions of dollars in government fines as business expenses in the future if management was not affected.
The bank did not respond to requests for comment.
Bharat Masrani, president and CEO of TD Bank Group, speaks at the bank's annual general meeting on March 30, 2017 in Toronto, Ontario. (Reuters/Peter Power)
The bank's chief executive, Bharat Masrani, told The Associated Press that the bank is taking steps to fix deficiencies and end corruption after pleading guilty last month.
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“We know what's wrong and we're fixing it,” he said. “As we move forward, we strive to ensure that something like this never happens again, and we are 100% confident that we will get to the other side and come out even stronger.”
To address money laundering issues, the bank says Launched a multi-year security enhancement that included hiring dozens of new leaders and hundreds of experts in anti-money laundering and combating financial crime.
The Associated Press contributed to this report.
