Employees at TD Bank had a joke about their own employer. Internally they called it “America’s Most Convenient Bank”, a nod to how easy it was to push dirty money through. U.S. Attorney General Merrick Garland repeated the nickname when the Department of Justice laid out its case against the lender.
The penalty came to about $3 billion. Roughly $1.8 billion goes to the DOJ and $1.3 billion to the Financial Crimes Enforcement Network (FinCEN), which called it its largest penalty ever on a depository institution. Another $450 million goes to the Office of the Comptroller of the Currency and $123.5 million to the Federal Reserve. TD Bank, the tenth-largest bank in the United States by assets, pleaded guilty to violating the Bank Secrecy Act. Global Relay’s summary of the case says it became the first U.S. bank to admit conspiracy to commit money laundering.
What went unwatched
The size of the blind spot drew the most attention. From January 2018 to April 2024, TD Bank left more than 90 percent of its transaction volume, around $18.3 trillion, outside automated monitoring, according to compliance firm Zyphe’s reading of the case. Whole categories, such as domestic automated clearing house transfers and some check activity, were excluded from scope. This was a decision about what to monitor, not a missed alert.
Three money-laundering networks used the gap to move more than $670 million through TD Bank accounts. Court documents described “long-term, pervasive and systemic deficiencies” in the bank’s anti-money-laundering controls, which went uncorrected. Senior executives, including the bank’s AML officer, knew of serious problems with the program and did not try to fix them, according to the summary.
Staff on the inside
Five TD Bank insiders opened and maintained accounts for laundering networks, moving $39 million. Employees received $57,000 worth of gift cards as bribes to look away. The DOJ also cited peer-to-peer transactions with links to human trafficking that the bank failed to spot.
Nicole Argenteri, head of the DOJ’s Criminal Division, said TD Bank “placed profits over compliance”. She pointed to a “flat-cost paradigm” that capped spending on the AML program while risks grew. “You are the first line of defense,” she told U.S. banks. Deputy Attorney General Lisa Monaco put it more bluntly: “Crime doesn’t pay, and neither does flouting compliance.”
Remedies and fallout
TD Bank cooperated with investigators, which earned a 20% reduction in the penalty, but only after it learned of the DOJ inquiry. A monitor will oversee remediation for four years, including an end-to-end review of the AML program and the filing of missing suspicious activity reports. For the first time, FinCEN will also require reviews of accountability and data governance.
Chief executive Bharat Masrani is due to retire on April 10, 2025. “The anti-money laundering challenges we face took place on my watch as CEO and I take full responsibility,” he said.
