TD Bank Fined Record $3 Billion for Drug Cartel Money Laundering Failures

TD Bank has agreed to pay $3 billion to settle charges that it failed to adequately monitor money laundering activities linked to drug cartels, regulators announced Thursday. The settlement includes a $1.3 billion penalty to the U.S. Treasury Department’s Financial Crimes Enforcement Network, marking a record fine for a bank. Additionally, TD will pay $1.8 billion to the U.S. Justice Department and plead guilty to resolve allegations of violating the Bank Secrecy Act.

The U.S. Department of Justice stated that TD Bank had “long-term, pervasive, and systemic deficiencies” in its transaction monitoring procedures. Between January 2018 and April 2024, over 90% of transactions were left unmonitored, allowing three money laundering networks to move more than $670 million through TD Bank accounts, according to court filings.

In one case, TD Bank employees accepted over $57,000 in gift cards in exchange for processing more than $470 million in cash deposits from a money laundering network, deliberately bypassing required reporting, according to the U.S. Department of Justice (DoJ). The Office of the Comptroller of the Currency (OCC) added that TD Bank processed hundreds of millions of dollars in transactions that clearly showed signs of highly suspicious activity.

As part of the settlement, TD Bank will undergo four years of monitoring by the Financial Crimes Enforcement Network (FinCEN) to ensure compliance with the agreement. “While most financial institutions have worked with FinCEN to protect the integrity of the U.S. financial system, TD Bank did the opposite,” stated Wally Adeyemo, Deputy Secretary of the Treasury. He highlighted that the bank’s failures enabled a range of illicit activities, from narcotics and fentanyl trafficking to terrorist financing and human trafficking.

The U.S. Federal Reserve has also fined TD Bank and will require it to relocate its anti-money laundering compliance office to the U.S. In a notable part of the agreement, the OCC is placing restrictions on TD Bank’s growth within the U.S., a rare but not unprecedented measure. Wells Fargo faced similar restrictions in 2018 after being fined for widespread consumer abuses, including creating millions of fake accounts, and continues to operate under those restrictions today.