TD Bank facing $3 billion in penalties

A Chinese criminal operation funnel fentanyl money through U.S. branches of the bank, federal prosecutors charged after an extensive investigation.

The bank failed to monitor money-laundering practices closely enough, feds charge

TD Bank's U.S. entity is in big trouble with the U.S. government and is expected to be hit with $3 billion in penalties today and to accept limits on its growth in the U.S. It all stems from allegations that the bank didn't properly monitor money laundering by drug cartels. 

 

The bank, the U.S. subsidiary of its Canadian parent, Toronto Dominion Bank, is expected to plead guilty to criminal charges resulting from a Justice Department investigation, the Wall Street Journal reports

 

In addition to fines and penalties, the bank's retail business will be capped and it will be placed under supervision by the Treasury Department's Financial Criimes Enforcement Network, the report said. 

 

Chief Executive Bharat Masrani issued a statement in August expressing regret for the bank's alleged misdeeds and later announced he would step down.

 

“We recognize the seriousness of our U.S. AML (anti-money laundering) program deficiencies and the work required to meet our obligations and responsibilities is of paramount importance to me, our senior leaders, and our boards,” Masrani said.

 

TD is Canada's second biggest bank and has had big ambitions for its U.S. unit, which just a few days ago was named the "best consumer digital bank in North America" by a trade publication. 

 

The investigation into TD's U.S. business practices started after agents discovered a Chinese criminal operation was laundering proceeds of fentanyl sales through TD branches in New York and elsewhere, bribing bank employees to assist, the Journal reported.