TD Bank faces fresh allegations as bribery woes spread to Florida
financialpost.comFresh allegations that a longtime Toronto-Dominion Bank branch worker in Florida took a series of US$200 bribes to help clients move millions to Colombia by skirting anti-money-laundering defences are adding to the lender’s mushrooming U.S. legal problems.
Gerry Aquino Vargas, the now-former retail banker in a Hollywood, Fla., outpost of Canada’s second-largest bank, falsified documents to open dozens of accounts and provided concierge-like services to help cash flow across borders, according to American prosecutors. In another recent case, a former TD branch employee in New York admitted to bypassing the bank’s compliance measures to defraud a customer.
The cases — which haven’t yet been reported and don’t identify Toronto-Dominion by name — are part of a sweeping probe by officials at the United States Justice Department, bank regulators and Treasury Department into allegations of money laundering and other financial crimes at the bank. The dragnet may ultimately lead to a costly settlement for TD that some analysts now peg at US$2 billion and, perhaps worse for the firm’s investors, a yearslong setback for its lofty U.S. ambitions.
In a major blow to those plans, the company last year scuttled a US$13.4 billion takeover of First Horizon Corp. — saying it didn’t see a path for regulatory approval. The deal would have consolidated TD’s status as one of the biggest U.S. banks. The lender has also had to spend more than US$350 million shoring up anti-money-laundering defenses and recently had its outlook cut by Fitch Ratings Inc.
So far prosecutors in the U.S. Attorney’s Office for the District of New Jersey have filed at least four cases alleging serious misconduct by branch employees in New York, New Jersey and Florida.
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