TD Bank Group has agreed to pay fines totaling approximately US$3.09 billion (C$4.25 billion) to several US regulators after pleading guilty to several charges related to shortcomings in its program against money laundering.
The total amount includes a US$1.8 billion settlement with the U.S. Department of Justice and the U.S. Attorney’s Office for the District of New Jersey in connection with their investigation. The US Treasury Department’s Financial Crimes Network fined TD US$1.3 billion.
The bank also received a cease and desist order, a US$450 million penalty and non-financial sanctions from the Office of the Currency Control (OCC) that limit its growth in the United States. The OCC determined that TD’s transaction monitoring program contained “significant systemic deficiencies.”
The first bank to admit to a conspiracy
U.S. Attorney General Merrick Garland said Thursday afternoon at a news conference that TD became the largest bank in U.S. history to plead guilty to violations of the Act’s program. banking secrecy and the first to admit to a conspiracy to commit money laundering.
Mr. Garland said TD created an environment “that allowed financial crime to flourish.”
“There is nothing wrong with a bank trying to make its services convenient for its honest customers, but there is something terribly wrong with a bank knowingly making its services convenient for criminals.” , he told reporters at the press conference.
“TD Bank chose profits over compliance to reduce costs. This decision is now costing the bank billions of dollars in criminal and civil penalties,” he added.
TD said the fines will mainly be covered by previous provisions it has set aside totaling US$3.05 billion. It also agreed to make fixes to its anti-money laundering program and to submit to formal monitoring of this process.
The total assets of TD’s two American banking subsidiaries cannot exceed US$434 billion under the sanctions. This restriction does not apply to TD Securities or any of the bank’s Canadian or global operations.
TD will be subject to stricter approval processes in the United States for new products, services, markets and branches.
A “difficult chapter”
TD CEO Bharat Masrani called the affair a “difficult chapter in the bank’s history.”
“We take full responsibility for the failures of our program [de lutte contre le blanchiment d’argent] in the United States, and we are making the investments, changes and improvements necessary to deliver on our commitments,” Masrani said in a press release Thursday.
“These failures occurred during my tenure as CEO, and I apologize to all stakeholders,” he added.
Last month, Mr. Masrani said he took responsibility for the failings, and the bank announced that Raymond Chun would succeed him upon his retirement next year.
Prosecutor Garland said TD admitted in its response to the charge that it allowed three money laundering rings to transfer more than US$670 million through TD Bank accounts over a six-year period. years.
At least one of these schemes involved five TD employees who conspired with criminal organizations to open and maintain accounts at the bank that were used to launder US$39 million to Colombia, including cash from drug trafficking, Mr. Garland said.
“On several occasions, senior executives, including the one who became the bank’s head of anti-money laundering, knew there were serious problems with the anti-money laundering program of the bank, but the bank failed in its task of correcting them,” said the prosecutor.
Two employees accused
In total, the U.S. Department of Justice has prosecuted about 20 people for their involvement in these money laundering schemes, Garland said. He added that the Justice Department has charged two TD employees for their involvement in one of the schemes.
The Superintendent of Financial Institutions of Canada, Peter Routledge, affirmed that the information communicated by the United States authorities is “serious in nature”.
“When risks and deficiencies of this nature arise, the Office of the Superintendent of Financial Institutions (OSFI) expects, and may require, that the board of directors and management of the institution in question take appropriate action. “require to correct the situation without delay and that they attach particular importance to corporate governance, compliance as well as financial and operational resilience”, he underlined in a written statement.