TD Bank Faces $1.8 Billion in Penalties for Bank Secrecy Act and Money Laundering Failures

MORRISTOWN, NJ — TD Bank, N.A., the 10th largest bank in the United States, and its parent company, TD Bank US Holding Company, have pleaded guilty to federal charges related to violations of the Bank Secrecy Act (BSA) and money laundering conspiracy. The bank has agreed to pay over $1.8 billion in penalties, following a multi-year investigation by the U.S. Attorney’s Office for the District of New Jersey and the Justice Department.

“By making its services convenient for criminals, TD Bank became one,” said Attorney General Merrick B. Garland. “Today, TD Bank also became the largest bank in U.S. history to plead guilty to Bank Secrecy Act program failures, and the first US bank in history to plead guilty to conspiracy to commit money laundering. TD Bank chose profits over compliance with the law — a decision that is now costing the bank billions of dollars in penalties. Let me be clear: our investigation continues, and no individual involved in TD Bank’s illegal conduct is off limits.”

TD Bank pleaded guilty before U.S. District Judge Esther Salas in Newark federal court on charges of failing to maintain an anti-money laundering (AML) program that complied with the BSA, failing to file accurate Currency Transaction Reports (CTRs), and laundering money. The guilty plea follows findings that, between January 2014 and October 2023, the bank's AML program was riddled with long-term, systemic deficiencies that enabled criminal networks to exploit the bank for illegal financial activities.

“TD Bank prioritized growth and convenience over following its legal obligations. As a result of staggering and pervasive failures in oversight, it willfully failed to monitor trillions of dollars of transactions – including those involving ACH transactions, checks, high-risk countries, and peer-to-peer transactions – which allowed hundreds of millions of dollars from money laundering networks to flow through the bank, including for international drug traffickers. The bank was aware of these risks and failed to take steps to protect against them, including for two networks prosecuted in New Jersey and elsewhere – one that dumped piles of cash on the bank’s counters and another that allegedly withdrew amounts from ATMs 40 to 50 times higher than the daily limit for personal accounts,” said U.S. Attorney Philip R. Sellinger.

According to court documents, TD Bank’s senior executives enforced a cost-saving measure, referred to as a “flat cost paradigm,” which restricted the bank's budget from increasing year-over-year, despite significant growth in its profits and risk profile. This budget constraint led to failures in maintaining and improving the bank’s AML policies, procedures, and controls. As a result, TD Bank’s transaction monitoring system remained static for nearly a decade, allowing billions of dollars in suspicious transactions to go undetected.

From January 1, 2018, to April 12, 2024, TD Bank failed to automatically monitor 92% of its transaction volume—amounting to approximately $18.3 trillion in activity. This failure allowed money laundering networks to transfer over $670 million through TD Bank accounts between 2019 and 2023. One such network, between 2018 and 2021, moved over $470 million through nominee accounts, incentivizing bank employees with over $57,000 in gift cards to overlook suspicious transactions.

The Justice Department has already charged over two dozen individuals involved in these schemes, including five TD Bank employees who conspired to aid a money laundering operation that funneled approximately $39 million through ATM transactions in the United States and Colombia.

“For nearly a decade, TD Bank failed to update its anti-money laundering compliance program to address known risks. As bank employees acknowledged in internal communications, these failures made the bank an ‘easy target’ for the ‘bad guys.’ These failures also allowed corrupt bank employees to facilitate a criminal network’s laundering of tens of millions of dollars,” said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division. “U.S. financial institutions are the first line of defense against money laundering and illicit finance. When they participate in crime rather than prevent it, we will not hesitate to hold them accountable to the fullest extent of the law.”

As part of the plea agreement, TD Bank will forfeit $452 million and pay an additional $1.43 billion in fines, totaling nearly $1.9 billion in penalties. The bank has also agreed to appoint an independent compliance monitor for three years to enhance its AML compliance program. In addition to the Justice Department’s penalties, TD Bank reached separate agreements with the Federal Reserve Board, Office of the Comptroller of the Currency, and the Financial Crimes Enforcement Network (FinCEN), which will oversee further corrective actions.

This resolution is part of the Justice Department’s broader efforts to prosecute banks and financial institutions for violations of the BSA and other financial laws. Since 2010, the Department's Bank Integrity Unit has imposed over $25 billion in penalties on financial institutions for their role in facilitating money laundering, sanctions violations, and other crimes.

The investigation into TD Bank was conducted with assistance from numerous federal, state, and local agencies, including the IRS Criminal Investigation, the Drug Enforcement Administration, and the Morristown Police Department.

TD Bank’s sentencing and continued cooperation in ongoing investigations are seen as part of the federal government's commitment to holding financial institutions accountable for enabling criminal activities through inadequate oversight and compliance failures.

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