The Department of Justice announced on Thursday a record $3 billion fine against TD Bank for not monitoring drug cartels’ money laundering.
The U.S. Treasury Department will receive $1.3 billion from the fine that will go to the department’s Financial Crimes Enforcement Network, CNN reported. Another $1.8 billion will be paid to the U.S. Justice Department.
The DOJ said that the bank, which is based in Canada, made it “convenient” for criminals to open accounts for almost 10 years, The New York Times reported.
In addition to the fine, the bank pleaded guilty to end the ingestion that the bank violated the Bank Secrecy Act and allowed money laundering.
The Wall Street Journal reported that both the Justice and Treasury departments will monitor the bank. The Times reported that the bank will have a limit on new deposits made in the U.S. which will hamper the company from growing its business in America. The asset cap, the first since Wells Fargo was capped in 2018, will limit TD Bank from increasing assets higher than what it currently holds, or about $370 billion.
The company will also have to move its anti-money laundering compliance office to the U.S. CNN reported.
The $3 billion fine is the largest penalty imposed on a bank for violating anti-money laundering laws. The previous record was the $1.92 billion fine HSBC paid more than a decade ago. The British bank transferred billions of dollars from Mexican drug cartels and sanctioned countries such as Iran, the Times reported.
TD Bank pleaded guilty to a charge of conspiring to fail to maintain an adequate anti-money laundering program and for failing to file accurate transaction reports, the Times reported.
Court documents state that some employees allowed money laundering by gangs. Federal authorities accused the bank of being slow to find the accounts and to do anything about them.
The DOJ said in a statement that the bank had “long-term, pervasive, and systemic deficiencies” when it came to monitoring transactions. It alleged that more than 90% of transactions from January 2018 to April 2024 went unmonitored, allowing “three money laundering networks to collectively transfer more than $670 million through TD Bank accounts,” CNN reported.
The department said employees collected more than $57,000 in gift cards to process more than $470 million in cash deposits, CNN reported. The cards were payments to “ensure employees would continue to process their transactions” and not declare the transitions in required reports.
While based in Canada, TD Bank has about 1,100 branches in the U.S., the Times reported.
TD Bank did not comment, CNN reported but had a call with investors scheduled for Thursday.
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