TD Bank Pleads Guilty and Pays $3 Billion to Settle Money-Laundering Case

TD Bank agreed to pay about $3 billion in fines to U.S. authorities and pleaded guilty on Thursday to money laundering-related charge in a case brought by federal prosecutors, who said the Canadian bank made it “convenient” for criminals to open accounts and transfer funds for nearly a decade.

In settling the case, federal bank regulators also imposed a cap on TD’s ability to take on new deposits in the United States, a rare move that will limit the ability of the lender to grow its business in a key market.

The combined penalties are the largest ever imposed by American authorities on a bank for violating anti-money laundering laws, exceeding the $1.92 billion the British bank HSBC paid in 2012 for transferring billions for Mexican drug cartels and sanctioned nations like Iran.

The Office of the Comptroller of the Currency hit TD Bank with what is considered the industry’s most drastic punishment: an “asset cap” that prevents the bank from growing any larger than its current size. TD Bank, with about $370 billion in assets, is the first big bank to face an asset cap since Wells Fargo, which has been constrained since 2018 for a litany of misdeeds including opening sham bank accounts for its customers without their consent.

The bank pleaded guilty to a charge of conspiring to fail to maintain an adequate anti-money laundering program and failing to file accurate transaction reports. Cynthia Adams, TD Bank’s chief legal officer in the United States, entered the guilty plea on behalf of the bank’s U.S. subsidiary in Federal District Court in Newark, before U.S. Judge Esther Salas.

Federal prosecutors, in documents filed in court, said some of the bank’s employees had enabled money laundering by criminal gangs, which the bank was slow to detect and address. Prosecutors said they had also charged over two dozen individuals, including two bank insiders.

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