TD Bank Appoints Compliance Monitor After $3 Billion US Penalty for Money Laundering

TD Bank, one of the largest banks in the United States, has agreed to pay a historic $3 billion penalty for violating anti-money laundering (AML) laws and has appointed a compliance monitor to oversee its remediation efforts. The penalty, which includes a $1.8 billion criminal fine and a $1.3 billion civil penalty, is one of the largest ever imposed on a financial institution in the United States. The bank has also agreed to a four-year independent monitorship to ensure that it complies with the required changes to its AML and risk controls.

The penalty stems from TD Bank's failure to maintain an adequate AML program, which allowed three money laundering networks to collectively transfer more than $670 million through its accounts between 2019 and 2023. The bank's AML failures enabled these networks to operate with impunity, facilitating the laundering of drug proceeds and other illicit activities. The U.S. Department of Justice (DOJ) and the Financial Crimes Enforcement Network (FinCEN) have charged over two dozen individuals in these schemes, including two bank insiders.

TD Bank's guilty pleas are part of a coordinated resolution with the Board of Governors of the Federal Reserve Board (FRB), the Office of the Comptroller of the Currency (OCC), and FinCEN. The bank has agreed to a cease and desist order and a $450 million civil money penalty against its U.S. banking subsidiaries, as well as a restriction on the growth of the bank and requirements that it remediate the deficiencies in a timely manner. FinCEN has assessed a $1.3 billion penalty against the bank for its BSA and AML compliance program failures.

The appointment of a compliance monitor is a significant step in safeguarding the U.S. financial system from criminal activity like fentanyl and human trafficking. The monitor will oversee TD Bank's required remediation and ensure that the bank fixes the vast deficiencies in its safeguards against money laundering. The Biden-Harris Administration is committed to taking action to keep communities safe from the sort of behavior facilitated by illicit finance and enabled by TD Bank's lax oversight.

TD Bank has taken full responsibility for its failures and has committed to investing in its compliance programs, hiring key executives, and strengthening its AML controls. The bank has already spent $500 million this year to enhance its compliance programs and has appointed a new global chief auditor and an acting U.S. chief auditor to lead its remediation efforts. The bank's U.S. CEO has reassured employees that TD Bank has the resources and commitment to improve its AML compliance program and restore its reputation.

In conclusion, TD Bank's appointment of a compliance monitor and its agreement to pay a historic $3 billion penalty for money laundering violations demonstrate the U.S. government's commitment to holding financial institutions accountable for their role in preventing money laundering and other financial crimes. The bank's remediation efforts, led by the compliance monitor, will be crucial in restoring its reputation and ensuring that it operates lawfully and safely moving forward.