The U.S. Department of Justice accused Toronto’s TD Bank of fraudulent actions that enabled criminal money laundering activities and imposed fines of about $3 billion.
The bank pleaded guilty to the accusations of failing to implement adequate controls for almost a decade to detect and prevent the laundering of funds from illicit activities.
“TD Bank created an environment that allowed financial crime to flourish,” stated Attorney General Merrick Garland, as reported by the local press.
Additionally, the attorney general was firm in his comparison: “By facilitating its services to criminals, it became one of them.”
At the end of September, the bank issued a statement announcing a provision of $2.6 billion in its financial results to cover the fines the financial institution expected to have to pay.
“We recognize the seriousness of the deficiencies in our anti-money laundering program in the U.S., and the work needed to meet our obligations and responsibilities is of utmost importance to me, our senior executives, and our boards of directors,” said Bharat Masrani, Group President and CEO of TD Bank Group at the time.
Furthermore, the Fed also issued a statement announcing that the central bank’s Board had decided to impose a fine of $123.5 million “for violations related to anti-money laundering laws.”
“TD failed to conduct adequate risk management and oversight of its U.S. retail banking operations, which resulted in the use of a U.S. subsidiary to launder hundreds of millions of dollars in illicit proceeds. The Board’s action will help ensure that TD operates in compliance with all U.S. laws and regulations,” the Fed’s statement said.
Moreover, the banking authority requires the Toronto-based entity to establish a series of actions.
First, TD must set up a new office in the U.S. dedicated to addressing the deficiencies identified by the authorities.
Additionally, TD must relocate parts of its anti-money laundering compliance program responsible for adhering to U.S. law to the U.S. and certify that “sufficient resources and attention are allocated to correcting the company’s deficiencies in its anti-money laundering efforts before issuing dividends or distributing capital.”
Finally, a comprehensive and independent review of the board of directors and company management must be conducted to ensure proper oversight of U.S. operations.
For Funds Society, Madrid