TD Bank Money Laundering Lawsuit and $3 Billion Settlement

TD Bank’s money laundering settlement, announced on October 10, 2024, totaled approximately $3.09 billion and made TD Bank the first major U.S. bank to plead guilty to conspiring to commit money laundering. The resolution covered nearly a decade of anti-money laundering failures that let three criminal networks move more than $670 million through the bank’s accounts, and it remains the largest monetary resolution ever imposed in a Bank Secrecy Act case.¹

What TD Bank Pleaded Guilty To

The case was filed in the U.S. District Court for the District of New Jersey as United States of America v. TD Bank, N.A. Two entities pleaded guilty on the same day. TD Bank, N.A., the U.S. retail subsidiary, admitted to three conspiracy charges: failing to maintain an anti-money laundering program that met Bank Secrecy Act requirements, failing to file accurate Currency Transaction Reports, and laundering monetary instruments.² The parent, TD Bank US Holding Company, pleaded guilty to two counts tied to its oversight role, admitting it had set a “tone from the top” that prioritized cost savings over compliance.³

On November 7, 2024, U.S. District Judge Esther Salas sentenced TD Bank, N.A. to five years of probation, a $500,000 criminal fine, and a forfeiture judgment of more than $452 million.⁴

How the $3.09 Billion Breaks Down

Four federal agencies announced their pieces of the resolution together on October 10, 2024:

Department of Justice: roughly $1.8 billion in combined criminal penalties, including approximately $1.43 billion from the holding company and the fine and forfeiture at the subsidiary level.¹³
FinCEN: a $1.3 billion civil money penalty, the largest in the agency’s history.⁵
Office of the Comptroller of the Currency: a $450 million civil money penalty.⁶
Federal Reserve Board: a $123.5 million civil money penalty against TD’s parent entities.⁷

The holding company received a 20 percent cooperation discount on its DOJ fine. The government noted that cooperation was “limited in some respects,” citing the bank’s failure to disclose certain concerns about Colombian money laundering and a significant gap in transaction monitoring it did not identify.³

What Actually Went Wrong Inside the Bank

Between January 2014 and October 2023, senior executives enforced what the Department of Justice called a “flat cost paradigm,” effectively freezing the AML compliance budget year after year while transaction volume and risk grew. From 2014 through 2022, the bank did not add a single new scenario to its automated transaction monitoring system.¹

The result: between January 2018 and April 2024, roughly 92 percent of transaction volume, about $18.3 trillion, went unmonitored. Domestic automated clearinghouse transfers, most check activity, and other whole categories of transactions were deliberately excluded from screening.¹

FinCEN found that TD Bank had “vastly underinvested” in compliance, spending an order of magnitude less than peer banks. The AML investigations unit accumulated a backlog of more than 70,000 unreviewed detection alerts. Until April 2021, the bank allowed cash exchanges for official bank checks without requiring a deposit into a customer account, sidestepping the monitoring that account-level activity would have triggered.⁸ The bank also failed to file Suspicious Activity Reports on thousands of transactions totaling approximately $1.5 billion.⁵

The Networks That Used the Bank

Three money laundering networks moved more than $670 million through TD Bank accounts between 2019 and 2023. Five TD Bank employees assisted one of them.¹ The largest was run by Da Ying Sze, who pleaded guilty in February 2022 to coordinating a $653 million conspiracy tied to narcotics proceeds, operating an unlicensed money transmitting business, and bribing bank employees.⁹

Between 2017 and 2021, Sze moved over $400 million through TD Bank, often walking into branches with bags of cash. The bank failed to restrict his activity and failed to identify him in more than 500 Currency Transaction Reports.⁵

Several TD Bank employees have since pleaded guilty. Wilfredo Aquino, a former assistant manager at a Midtown Manhattan branch, processed approximately 1,680 bank checks totaling over $92 million for Sze’s network in exchange for more than $11,000 in retail gift cards.⁹ Oscar Marcel Nunez-Flores, a former New Jersey employee, accepted bribes to open dozens of shell company accounts and issue over 600 debit cards, facilitating the laundering of more than $26 million through over 120,000 ATM withdrawals in Colombia.¹⁰ Leonardo Ayala, a former employee in Homestead, Florida, opened fraudulent accounts and issued over 150 debit cards to shell companies, facilitating roughly $5.5 million in ATM withdrawals in Colombia.¹¹ Jhonnatan Steven Rodriguez, another Florida branch employee, accepted $200 to $250 per account to fraudulently open approximately 140 accounts, often forging customer signatures.¹² The Department of Justice has indicated that more prosecutions are expected.

The Asset Cap and Other Non-Monetary Penalties

The money is not the whole story. The OCC imposed an asset cap on TD Bank’s U.S. operations, the first time it has used that tool in a BSA/AML case. The cap prohibits combined U.S. assets from exceeding approximately $434 billion, the level reported as of September 30, 2024, and it stays in place until the bank achieves full compliance and the OCC lifts it. If the bank misses compliance deadlines, the OCC can require asset reductions of up to 7 percent per year.¹³¹⁴

The DOJ and FinCEN appointed Guidepost Solutions as an independent compliance monitor, with a three-year term under the DOJ agreement and a four-year term under the FinCEN agreement.¹⁵ The Federal Reserve added its own requirements, ordering the bank to establish a new U.S. office dedicated to fixing the deficiencies, relocate parts of its AML function to the United States under domestic oversight, and certify sufficient resources before paying dividends or making capital distributions.⁷

Why This Case Broke From the HSBC Pattern

Federal authorities have historically avoided guilty pleas against large banks in AML cases. When HSBC faced allegations in 2012 of failing to monitor over $670 billion in wire transfers and facilitating at least $881 million in drug trafficking proceeds tied to the Sinaloa and Norte del Valle cartels, regulators used a deferred prosecution agreement carrying $1.92 billion in penalties. Officials at the time worried that criminal charges against a bank that size could “destabilize the global financial system” and function as a “death sentence.”¹⁶

TD Bank’s plea broke that pattern. It was the first time a major U.S. bank pleaded guilty to money laundering conspiracy, and the charges carried intentionality and knowledge requirements more serious than the negligence theories underlying earlier bank resolutions.¹ The DOJ alleged that TD Bank did not merely miss suspicious activity; it actively enforced a system that blocked any budget increase for AML compliance, even as internal auditors, the OCC, and third-party consultants flagged deficiencies.³

Leadership Shakeup and Pay Cuts

CEO Bharat Masrani’s departure was accelerated by two months, and Raymond Chun, then chief operating officer, took over as president and CEO on February 1, 2025. Masrani stepped down from the board but stayed on as an adviser until mid-2025 to assist with AML remediation.¹⁷

Five board directors retired at the April 2025 annual meeting, and Board Chair Alan MacGibbon announced he would step down by year’s end. Forty-one executives had their pay reduced by a combined $30 million. Masrani’s 2024 total compensation was cut by 89 percent, from $13.27 million to $1.5 million, with no cash incentive or equity award. Every other member of the senior executive team had variable compensation cut by at least 25 percent.¹⁷

Where Remediation Stands

TD Bank committed to spending $1 billion across 2025 and 2026 on the AML overhaul and reported that it had completed most necessary remediation actions, though audits and final regulatory sign-off remain pending.¹⁸ The bank nearly doubled its AML staff in the six months ending in May 2024, replaced its BSA officer, and updated training and procedures.⁸

The operational effects have been visible. TD Bank reduced its U.S. branch count by 7.5 percent since January 2025 and wound down or sold several business lines, including point-of-sale finance, correspondent lending, commercial auto deal lending, and export/import lending. Average loans in those non-core areas fell from $33 billion in the first quarter of 2025 to $11 billion a year later.¹⁸

Shareholders have also filed class action lawsuits in the United States and Canada alleging that TD Bank misrepresented the state of its AML controls and that the penalties and restrictions drove the stock price down. A Canadian securities class action brought by Rochon Genova LLP was awarded carriage by the Ontario Superior Court of Justice in February 2025 and is heading toward certification and leave motions scheduled for February 2026.¹⁹

1
U.S. Department of Justice. United States of America v TD Bank NA
2
Asset Forfeiture Law. TD Bank NA Criminal Information
3
Gibson Dunn. TD Bank US Holding Company Plea Agreement
4
LPF Law. TD Bank NA Sentencing Transcript
5
FinCEN. FinCEN Assesses Record $1.3 Billion Penalty Against TD Bank
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OCC. OCC Assesses Penalty Against TD Bank
7
Federal Reserve. Federal Reserve Board Enforcement Action
8
FinCEN. FinCEN TD Bank Consent Order
9
Forbes. TD Bank and the Turning Point in Big Bank Money Laundering Enforcement
10
U.S. Department of Justice. TD Bank Insider Pleads Guilty to Facilitating Colombian ATM Money Laundering Scheme
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U.S. Department of Justice. Former TD Bank Employee Pleads Guilty to Accepting Bribes, Laundering $5.5 Million to Colombia
12
U.S. Department of Justice. TD Bank Insider Pleads Guilty to Accepting Bribes to Fraudulently Open More Than 100 Bank Accounts
13
OCC. OCC Consent Order – TD Bank Asset Cap
14
TD Bank. Resolution of AML Investigations
15
Wall Street Journal. Monitor Appointed in TD Bank $3 Billion Anti-Money Laundering Settlement
16
New York Times DealBook. HSBC Said to Near $1.9 Billion Settlement Over Money Laundering
17
TD Bank. TD Bank Group Accelerates CEO Transition, Announces Board and Compensation Changes
18
American Banker. TD Reports Progress on Turnaround as AML Efforts Press On
19
Rochon Genova. TD Securities Class Action