TD Bank Criticized: Lapses in Money Laundering Controls Lead to Billion-Dollar Fine

The Canadian major bank Toronto-Dominion (TD) faces a massive scandal that is significantly tarnishing its good reputation. The background involves alarming failures in internal anti-money laundering controls, allowing criminal networks to conduct extensive illegal transactions in recent years. A staggering outcome that is proving costly for TD: over three billion US dollars in fines to US authorities and restrictions on its expansion plans in the United States. Additionally, TD had to abandon a $13.4 billion acquisition bid for the US bank First Horizon. Chief Executive Bharat Masrani has announced his resignation. Between 2014 and 2023, there were long-term and systematic deficiencies in TD's money laundering controls, which were ultimately penalized under the US Bank Secrecy Act with the largest fine ever imposed. According to authorities, TD allowed three money laundering networks to illicitly funnel more than 670 million dollars through the bank's accounts. A particularly sensitive example is the case of Da Ying Sze, who moved more than 470 million dollars through TD branches in several US states between 2018 and 2021, with the money originating from drug transactions, including fentanyl sales. This occurred despite internal alerts and suspicious transactions that went unaddressed. US authorities criticized the bank's deliberate cost-cutting measures that prevented investment in secure compliance programs. Lisa Monaco, US Deputy Attorney General, emphasized the shortsightedness of this strategy, which ultimately led to severe consequences. As part of an agreement with US authorities, TD must now improve its compliance program and appoint independent auditors to report any potential misconduct directly to the government over the coming years. US Attorney General Merrick Garland warned of further proceedings against individuals as investigations continue.