One of America’s largest banks on the verge of collapse: Historic settlement for what it has done
Credits: Todo Dinero
In breaking news this month, TD Bank will reach a historic settlement with U.S. Authorities. TD Bank is one of Canada’s largest lenders and is facing charges by the U.S. for allowing drug cartels and other criminals to transfer hundreds of millions of dollars in illicit funds through money laundering practices, according to media such as BBC or CNN. TD is the sixth largest bank in North America by assets and serves over 27.5 million customers around the world.
Historic settlement with authorities for criminal activity
TD Bank pleaded guilty to the money laundering criminal charges and is set to pay a settlement of $3 billion to U.S authorities. “TD Bank created an environment that allowed financial crime to flourish,” says Attorney General Merrick Garland said. “By making its services convenient for criminals, it became one.” TD Bank is the largest North American bank to plead guilty to such charges.
The bank had turned an extreme blind eye to their lack of anti-money laundering policy and security to the point where employees would allegedly joke about how easy it was to launder money through TD Bank. High-level executives were reportedly made aware of the problem but no change came to stop the criminal activity from occurring.
TD Banks fails to prevent money laundering for nearly a decade
The illicit activities had reportedly not been acted on for nearly a decade despite obvious criminal activity taking place. One such incident was a client making daily deposits of $1 million in cash. The $3 billion settlement is one of the largest fines a bank has ever had to pay out. In addition to this, they are facing restriction on their growth in the U.S. TD Bank has reportedly taken “full responsibility” for their failure to enforce anti-monetary laundering law.
Money laundering refers to a process of making money earned through criminal activity appear legitimate. It typically involves introducing the illegal funds into banks or using the money to purchase assets. The money is then sent through a series of complex transactions to cover its origin. The money is then reintroduced into the economy as “clean money” with the illegal source obscured. Most of the biggest money laundering schemes of recent re conducted by banks themselves, however individuals have been able to launder significant monetary funds too.
TD Bank taking steps to fix the situation
TD Bank has already taken action to correct the money laundering activity. They have hired 700 new employees specifically to specialize in the problem are are currently making “the investments, changes and enhancements required to deliver on our commitments”. “This is a difficult chapter in our bank’s history. These failures took place on my watch as CEO and I apologize to all our stakeholders,” says CEO Bharat Masrani. Masrani is set to retire in 2025 after a decade as CEO of the TD Bank Group.
“We know what the issues are, we are fixing them. As we move forward, we’re ensuring that this never happens again,” Masrani said. “And I’m 100% confident that we get to the other side and emerge even stronger.” Over $670 million were moved through through TD Bank through at least three different money laundering networks.
TD Bank is the largest lender in US history to plead guilty to failures under the Bank Secrecy Act and the first to plead guilty to conspiracy to commit money laundering, the US justice department said. “From fentanyl and narcotics trafficking, to terrorist financing and human trafficking, TD Bank’s chronic failures provided fertile ground for a host of illicit activity to penetrate our financial system,” said Deputy Secretary of the Treasury Wally Adeyemo.
One individual reportedly moved more than $470 million in drug proceeds and other illicit funds through TD Bank branches. The institution has become the bank of choice for criminal activity and money laundering tactics.
