WASHINGTON, DC – OCTOBER 10: U.S. Attorney General Merrick Garland (2nd-L) speaks as (L-R) Deputy … [+]
In October 2024 TD Bank pled guilty to both civil and criminal charges including conspiring to violate the Bank Secrecy Act related to money laundering. As a condition of the settlement, TD Bank paid a $1.8 billion criminal penalty which, when added to the civil fines, brought the total to $3 billion to settle the charges.
Among the instances of money laundering done through TD Bank as indicated in the settlement agreement was the laundering of $474 million in cash from fentanyl sales in the United States by Chinese criminal syndicates.
Additionally, as a further condition of the settlement, TD Bank agreed to have an independent monitor oversee TD Bank’s actions to install proper systems to identify and block money laundering. The consulting firm Guidepost Solutions has been appointed to serve as the independent monitor following their recommendation by the Justice Department and the Treasury Department’s Financial Crimes Enforcement Network. For its part, TD Bank responded to the appointment by saying that it looks forward to working with Guidepost. Guidepost Solutions was previously appointed by the federal court in Chicago on the recommendation of the Commodity Futures Trading Commission and the U.S. Department of Justice as the independent Monitor of BP pursuant to its deferred prosecution agreement that settled allegations of market manipulation by BP’s U.S. energy trading operation.
In the case of TD Bank, the Justice Department requires the independent monitor serve for three years while FinCEN. requires the independent monitor to serve for four years.
In September 2024, TD Bank’s President and CEO Bharat Masrani announced he would be retiring in April 2025, but retired earlier on February 1, although he will remain as an adviser until July to assist in efforts to improve the bank’s anti-money laundering systems. No civil or criminal charges were brought against Masrani individually and, if history is any guide, none will be filed.
The new president and CEO of TD Bank, Leo Salom, has said that fixing its anti-money laundering operations is the bank’s top priority. According to Salom, TD Bank has hired new anti-money laundering specialists to its staff and also instituting new technological changes designed to detect suspicious activities.
During the bank’s last quarterly earnings call, a presentation was made in which the bank indicated that it had overhauled its anti-money laundering program leadership and strengthened its oversight structure across risk management and audit functions as well as establishing new standards to measure financial crime risk more effectively. In addition, in the presentation the bank indicated it was enhancing its procedures for cash intensive clients and deploying new data-driven technology solutions. These remediation actions are slated to be phased in between 2024 and 2028 thereby targeting their completion to correspond to the term of the independent monitor.