TD Bank is reportedly on the hook for $3 billion in fines and penalties after federal authorities uncovered its alleged role in failing to prevent money laundering by drug cartels. The U.S. Department of Justice and federal financial regulators reached the settlement after a deep probe into the bank’s operations. The investigation centers on accusations that TD Bank did not properly monitor transactions, allowing drug traffickers to launder massive sums, some linked to the sale of fentanyl in the U.S.
As part of the settlement, TD Bank, the 10th-largest U.S. bank by assets, agreed to growth limitations imposed by the Office of the Comptroller of the Currency (OCC). This restriction echoes the 2018 sanctions placed on Wells Fargo over its widespread consumer abuses. The Wall Street Journal broke the story, reporting that Chinese organized crime groups and drug traffickers funneled illegal profits through TD Bank.
In a statement, Michael Hsu, Acting Comptroller of the Currency, said, “TD Bank’s persistent prioritization of growth over controls allowed its employees to break the law and facilitate the laundering of hundreds of millions of dollars. The bank’s blatant risk management failures attracted illicit actors and are egregious and unacceptable.”
In addition to the $3 billion settlement, the Federal Reserve Board imposed a $124 million fine for violations of anti-money laundering laws, citing TD Bank’s failure to oversee risk management adequately. These oversights allowed the bank’s U.S. subsidiary to be used to funnel hundreds of millions of dollars in illegal proceeds. The bank’s stock took a hit, dropping more than 3% by midday Thursday.
This isn’t the first time TD Bank has found itself in hot water. Just last month, the Consumer Financial Protection Bureau fined the bank nearly $28 million for providing inaccurate information to credit reporting agencies and delaying the correction of errors for over a year.
