TD Bank fined US$3B, faces U.S. asset cap in money laundering plea deal

globalnews.ca:

TD Bank became the largest bank in U.S. history to plead guilty to violating a federal law aimed at preventing money laundering, and agreed to pay over $3 billion in penalties to resolve the charges, government authorities said on Thursday.

The plea deal, which includes a rare imposition of an asset cap and other business limitations, arises from multiple government investigations into what authorities described as pervasive issues.

TD Bank shares fell almost 5% on Thursday afternoon.

For years, TD ignored red flags from high-risk customers and created a “convenient” environment for bad actors to exploit, the government said.

In one example, authorities said, TD Bank facilitated over $400 million in transactions to launder funds on behalf of people selling fentanyl and other deadly drugs.

TD is Canada’s second biggest bank and the 10th largest in the U.S.

Two units of the bank pleaded guilty to conspiring to launder money and conspiring to fail to file accurate reports or maintain a compliant anti-money laundering program, the Justice Department said.

“TD Bank chose profits over compliance in order to keep its costs down,” U.S. Attorney General Merrick Garland said at a press conference, noting TD was the largest bank to admit to violating the Bank Secrecy Act.

The asset cap, imposed by the Office of the Comptroller of the Currency, is a rare step typically reserved for severe cases. It deals a major blow to TD. The bank has sought to expand further in the U.S., which accounts for about a third of its income.

“We will make the necessary changes to put the bank on a stronger foundation,” incoming CEO Ray Chuntold investors on a conference call on Thursday. “This is TD’s number-one priority, and my number one priority.