TD Bank pay $3 billion fine for cartel money laundering

TD Bank will pay $3 billion to settle charges of failing to monitor money laundering by drug cartels, regulators announced Thursday.

The Canadian bank’s settlement includes a $1.3 billion fine to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), marking the largest such fine in history.

The bank also agreed to pay $1.8 billion to the U.S. Department of Justice (DOJ) and pled guilty to violating the Bank Secrecy Act. Regulators condemned the bank’s “long-term, pervasive, and systemic deficiencies” in monitoring transactions.

“By making its services convenient for criminals, it became one,” said Attorney General Merrick Garland. The lapse allowed over 90% of transactions to go unmonitored from 2018 to 2024, enabling cartels to transfer $670 million through TD Bank accounts.

The DOJ detailed several money laundering schemes, including one in which a man named David moved over $470 million in illicit funds, bribing bank employees with gift cards to ensure transactions went unreported. In another case, TD Bank employees conspired with criminal networks to launder $39 million to Colombia. Despite clear signs of illegal activity, the bank failed to act, with employees even joking about the bank’s lax oversight.

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TD Bank CEO Bharat Masrani apologized: “These failures took place on my watch… I apologize to all our stakeholders.”

The penalties stunned Wall Street, leading to a 6% drop in TD’s U.S.-listed shares. Analysts warn the growth restrictions imposed as part of the settlement could hinder TD’s U.S. expansion.

Critics argue the settlement falls short. “Big banks treat government fines as the cost of doing business,” said Senator Elizabeth Warren, calling for stricter enforcement of anti-money laundering laws.