TD Bank pleads guilty and will pay a $3 billion fine

TD Bank pleaded guilty Thursday in a criminal money laundering case and agreed to pay a whopping $3 billion in fines and other penalties to the Justice Department and federal financial regulators for failing to monitor money laundering by drug cartels.

As part of the deal, TD Bank, whose U.S. subsidiary is the 10th largest American bank by assets, will accept limits on its growth, the Office of the Comptroller of the Currency announced Thursday.

Attorney General Merrick Garland said a monitor would monitor the bank's compliance with anti-money laundering practices for three years as part of a settlement.

Garland said TD Bank admittedly failed to monitor a staggering $18.3 trillion in customer activity over a six-year period ending last October, allowing three money laundering networks to steal more than $670 million to be transferred via accounts at the bank.

At least one of those schemes involved five bank employees, Garland said.

“At various times, senior executives, including the person appointed as the bank's chief anti-money laundering officer, knew that there were serious problems with the bank's anti-money laundering program, but the bank failed to address them “said the Attorney General said.

The Wall Street Journal reported in May that the Justice Department was investigating how Chinese organized crime groups and drug traffickers used TD Bank to launder money from sales of the deadly opiate fentanyl in the United States.

“TD Bank’s continued prioritization of growth over controls allowed its employees to violate the law and facilitate the laundering of hundreds of millions of dollars. The bank’s glaring risk management failures attracted illicit actors and are egregious and unacceptable,” Acting Comptroller of the Currency Michael Hsu said in a statement.

The restrictions on TD Bank's growth are similar to those imposed by the Federal Reserve Wells Fargo in 2018 about what the Fed called “widespread consumer abuse” at that bank.

The Federal Reserve Board on Thursday fined TD Bank more than $124 million for violations related to anti-money laundering laws, saying the bank failed to “provide adequate risk management and oversight of its operations.” to conduct retail banking business in the United States, which resulted in the establishment of a U.S. subsidiary.” are used to launder hundreds of millions of dollars in illegal proceeds.

Sen. Elizabeth Warren, D-Mass., criticized Thursday's deal in a statement to CNBC.

“Big banks view government fines as a cost of doing business,” Warren said.

“This settlement exonerates bad bank managers for allowing TD Bank to be used as a dark money fund for criminals. The Department of Justice and the Office of the Comptroller of the Currency must do a better job enforcing our anti-money laundering laws,” Warren said.

TD Bank shares were down more than 3% as of midday trading Thursday.

A spokeswoman for Toronto-based TD Bank, Canada's second-largest bank, had no immediate comment.

In September, TD Bank was ordered to pay nearly $28 million by the Consumer Financial Protection Bureau for repeatedly providing consumer reporting agencies with information about customers that contained numerous errors and waiting more than a year to fix those errors , even though she knew about it.

This is developing news. Check back for updates.