TD Bank Accepts Cap on US Growth, $3 Billion in Penalties After Failing to Monitor Money Laundering

TD Bank pleaded guilty Thursday to conspiracy to commit money laundering for criminal groups, including global drug cartels.

Photo of TD Bank
Photo by Mike Mozart via CC BY 2.0

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It’s like a Canadian adaptation of “Breaking Bad.” 

TD Bank, the US subsidiary of financial giant Toronto-Dominion Bank, pleaded guilty Thursday to conspiracy to commit money laundering for criminal groups, including global drug cartels. The penalties will have a dramatic impact on one of US retail banking’s most aggressive players.

You Had One Job

The Justice Department did not mince words. “TD Bank created an environment that allowed financial crime to flourish by making its services convenient for criminals,” Attorney General Merrick Garland said at a Thursday press conference.

The evidence spoke for itself. TD Bank let three money-laundering networks send over $670 million through accounts from 2019 through 2023, the Office of the Comptroller of the Currency (OCC) said, creating opportunities for “terrorist financing or other illicit financial transactions.” In one jaw-dropping example, prosecutors said a Chinese group laundering fentanyl money paid TD Bank staff $57,000 in gift cards to ensure they would “continue to process their transactions” and not report them in statutory declarations. “While it nominally had a compliance program from January 2018 to April 2024, TD Bank failed to monitor approximately 92% of its total transactions amounting to approximately $18.3 trillion of transaction activity,” said Philip Sellinger, the US Attorney for New Jersey, who joined Garland at the press conference. The punishment was unsparing:

  • As part of its settlement, TD Bank — which has mounted an aggressive expansion into America that’s made it the country’s 10th largest bank — will see its growth ambitions halted. TD Bank will be subject to an OCC-imposed cap on its retail business that will prevent it from growing above its current US asset levels.
  • TD Bank is handing over $1.8 billion in penalties to the DoJ, $1.3 billion to the Treasury Department’s Financial Crimes Enforcement Network, and $450 million to the OCC.

Sorry Doesn’t Cut It: “These failures took place on my watch as CEO and I apologize to all our stakeholders,” said Bharat Masrani, TD Bank Group’s CEO, in a statement, noting the “difficult chapter in our bank’s history.” Things could get darker still: Wells Fargo — which, following a fake accounts scandal, operates under an asset cap like TD Bank will have to — has had to lay off thousands with its growth essentially limited.