TD Bank has become the largest U.S. bank to plead guilty to violating anti-money laundering laws, agreeing to a $3 billion settlement.
The charges stem from allegations that the bank, over several years, enabled drug cartels and other illicit actors to funnel billions of dollars through its accounts by ignoring red flags and fostering a culture of non-compliance, the New York Post reported.
The landmark fine, announced by U.S. authorities on Thursday, follows extensive investigations into what officials call “pervasive issues” at the bank.
The plea deal has significant consequences for TD, including an asset cap—an unprecedented penalty for a bank of its size—and strict limitations on its operations in the U.S.
These sanctions come as the bank aims to expand further into the U.S. market, which accounts for about a third of its overall revenue.
According to U.S. Attorney General Merrick Garland, TD Bank’s actions marked a “profit over compliance” strategy, a decision that would ultimately backfire.
For nearly a decade, TD Bank reportedly failed to monitor over $18 trillion in customer transactions, allowing three major money laundering networks to move illicit funds.
Employees were even said to have “openly joked” about the lack of oversight, further fueling the misconduct.
“It is no wonder that the motto ‘America’s most convenient bank’ was used as a joke among employees to describe TD Bank being convenient for criminals,” said Philip Sellinger, U.S. Attorney for New Jersey.
The fallout from the scandal has been swift. CEO Bharat Masrani publicly apologized, stating, “These failures took place on my watch as CEO, and I apologize to all our stakeholders.”