Fines of $1.8 billion announced Oct. 10 against TD Bank N.A. (TDBNA) for violations of anti-money laundering laws were the result of a coordinated resolution among the federal banking agencies and law enforcement, according to a release made public Friday by the inspector general for the federal bank deposit insurance agency.
The Federal Deposit Insurance Corp.’s (FDIC) Office of Inspector General (OIG) said that the Wilmington, Del.-based bank pleaded guilty Oct. 10 to conspiring to fail to maintain an anti-money laundering (AML) program that complies with the Bank Secrecy Act (BSA), fail to file accurate Currency Transaction Reports (CTRs), and launder money.
The OIG said the bank’s holding company (TD Bank US Holding, or TDBUSH) also pleaded guilty to causing TDBNA to fail to maintain an AML program that complies with the BSA and to fail to file accurate CTRs.
The OIG made its release public along with a group of releases related to its activities so far in October.
The OIG said that, according to court documents, between January 2014 and October 2023, TD Bank “had long-term, pervasive, and systemic deficiencies in its U.S. AML policies, procedures, and controls but failed to take appropriate remedial action.”
The OIG said that, instead, senior executives at TD Bank enforced a budget mandate, referred to internally as a “flat cost paradigm,” requiring that the bank’s budget not increase year over year despite its profits and risk profile increasing significantly over the same period. “Although TD Bank maintained elements of an AML program that appeared adequate on paper, fundamental, widespread flaws in its AML program made TD Bank an ‘easy target’ for perpetrators of financial crime,” the OIG said.
In addition to the bank regulators, the OIG said the investigation was joined by it and IRS Criminal Investigation, and the Drug Enforcement Administration (DEA). The OIG also said the Morristown, N.J., Police Department, U.S. Attorney’s Office for the District of Puerto Rico, U.S. Homeland Security Department Investigations, U.S. Customs and Border Protection, and New York City Police Department “provided substantial assistance.”