The following is an excerpt from the November 2024 issue of the Money Laundering and Forfeiture Digest:
TD Bank pleads guilty to concealment money laundering, failing to file complete CTRs, and failing to maintain an adequate AML program, and agrees to forfeitures and fines totaling $1.8 billion.
TD Bank, a Canadian bank that is now the tenth largest bank in the United States, entered guilty pleas to three money laundering charges and was assessed the largest fines and forfeitures that have ever been imposed on a financial institution in the United States.
In two detailed Criminal Informations – one against the bank and one against its U.S. holding company – the Government laid out three long-running money laundering schemes perpetrated by the bank’s customers with the knowledge and at times active participation of the bank’s own employees, as well as the bank’s persistent, pervasive, and long-term failure to maintain an adequate anti-money laundering (AML) program. As a result result of decisions by the bank’s senior management to minimize costs and to prioritize “customer experience,” the Government alleged, three money laundering networks were able to use the bank to launder over $670 million in criminal proceeds.
In its Plea Agreement, the bank admitted the factual allegations and agreed to plead guilty to a Section 371 conspiracy to commit concealment money laundering in violation of 18 U.S.C. § 1956(a)(2)(B)(i), to fail to file accurate Currency Transaction Reports in violation of 31 U.S.C. § 5324, and to fail to maintain an adequate AML program in violation of 31 U.S.C. § 5318(h). It also agreed to the criminal forfeiture of over $452 million, and to an additional fine of $1.4 billion.
The three money laundering operations all involved enormous sums of money. In the first case, the Government charged that the bank allowed its customer to launder millions of dollars in illicit drug proceeds through the bank, largely in cash, and sometimes in excess of one million dollars in a single day, by bribing bank employees to file 564 false or incomplete Currency Transaction Reports involving $412,876,589 in cash transactions. The failure to file accurate complete CTRs was the basis for the charge that the bank violated 31 U.S.C. §§ 5324 and 5322, and for the forfeiture of $412,876,589 in property involved in that offense pursuant to Section 5317(c).
In the second case, the Government charged that five bank employees assisted an international drug trafficking organization to move $39 million in drug proceeds through the bank from the United States to Colombia by circumventing internal policies and controls regarding the issuance of ATM cards. Instead of enforcing the bank’s 15-card limit for debit cards issued on business accounts, the bank issued as many as 50 cards per account, which allowed third parties to make a total of 194,940 ATM withdrawals from TD Bank accounts overseas.
This concealment money laundering scheme was the basis for the charge that the bank conspired to violate Section 1956(a)(2)(B)(i), and for the forfeiture of an additional $39 million in proceeds of that offense pursuant to 18 U.S.C. § 981(a)(1)(C).
Third, the Government charged that a money laundering organization that purported to be involved in the wholesale diamond, gold, and jewellery business moved approximately $123 million in criminal proceeds through the bank in a 13-month period by maintaining accounts in the names of shell companies, without the bank’s filing any Suspicious Activity Reports. According to the Government, if the bank’s monitoring programs had been updated, as had been recommended to its senior management, the system would have generated approximately 161 alerts on these suspicious transactions.
The following are links to the charging documents, the plea agreements, and to a table showing comparing the charges and sanctions in the TD Bank case with those in earlier prosecutions of financial institutions. The captions to the two cases are United States v. TD Bank, N.A., Cr. No. 24-cr-00667-ES (D.N.J. Oct. 10, 2024); and United States v. TD Bank US Holding Co., Cr. No. 24-cr-00668-ES (D.N.J. Oct. 10, 2024). SDC
TD Bank NA Criminal Information
TD Bank Holding Criminal Information
TD Bank Holding Plea Agreement