TD Bank Settlement: $3.1B Penalty, Asset Cap, and Charges

TD Bank agreed in October 2024 to pay approximately $3.1 billion to resolve federal anti-money laundering investigations, and the TD Bank settlement made it the first national bank in U.S. history to plead guilty to conspiring to commit money laundering. The resolution was the largest ever imposed under the Bank Secrecy Act, and it was split among the Department of Justice, the Financial Crimes Enforcement Network (FinCEN), the Office of the Comptroller of the Currency (OCC), and the Federal Reserve Board.¹

On October 10, 2024, TD Bank, N.A. and its parent, TD Bank US Holding Company, each pleaded guilty in the U.S. District Court for the District of New Jersey. The bank admitted to conspiring to fail to maintain a compliant anti-money laundering program, failing to file accurate Currency Transaction Reports, and laundering monetary instruments. The parent holding company pleaded guilty to causing both the AML failures and the inaccurate reporting. TD waived its right to appeal the conviction and sentence.¹²

How the $3.1 Billion Breaks Down

Four federal agencies divided the penalty:

Department of Justice: $1.8 billion in criminal penalties, the largest DOJ penalty ever imposed under the Bank Secrecy Act.¹
FinCEN: $1.3 billion, the largest FinCEN penalty ever assessed against a depository institution.³
OCC: $450 million civil money penalty paid to the U.S. Treasury.⁴
Federal Reserve: $123.5 million joint civil money penalty against TD’s parent and U.S. holding entities.⁵

TD Bank Group reported the total payment as US$3.088 billion (C$4.233 billion), fully provisioned in its 2024 fiscal year.⁶

What the Bank Did Wrong

The violations ran nearly a decade, from January 2014 to October 2023. Federal investigators found TD’s anti-money laundering program was chronically underfunded and understaffed. Senior executives enforced what the DOJ called a “flat cost paradigm,” effectively freezing the compliance budget as the bank grew and its risk profile expanded. Cost savings and customer experience were prioritized over regulatory obligations.¹

The scale of the gap was extraordinary. Between January 2018 and April 2024, the bank left 92% of its total transaction volume unmonitored, covering roughly $18.3 trillion in activity. Domestic automated clearinghouse transfers, most check activity, and other transaction types went unchecked. The transaction monitoring system remained essentially static from 2014 to 2022, with no new monitoring scenarios added despite known risks and new products.¹

The bank also failed to file Suspicious Activity Reports on thousands of transactions totaling about $1.5 billion. FinCEN found significant backlogs of potentially suspicious activity, including transactions tied to Venmo and Zelle, and inaction on funnel account activity involving high-risk countries. More than 5 million customer accounts were never assessed for compliance risk or given a risk rating.³

Internal awareness of the problem was widespread. Prosecutors said staff described TD Bank as an “easy target” for money laundering. In one exchange, an employee asked “how is that not money laundering,” and a back-office colleague replied, “oh it 100% is.”⁷

The Criminal Networks That Used the Bank

At least three distinct criminal networks moved more than $670 million through TD Bank accounts between 2019 and 2023. The Justice and Treasury departments said drug cartels used the bank to launder proceeds from fentanyl and other narcotics sales.¹⁸

The largest scheme was run by Da Ying Sze, known as “David,” who moved roughly $474 million through TD branches in New Jersey, New York, Pennsylvania, Maine, and Florida between 2018 and February 2021. Sze walked into branches with bags of cash and bribed bank employees with more than $57,000 in retail gift cards to process deposits without triggering mandatory reporting. TD failed to identify Sze as the actual person conducting transactions in more than 500 Currency Transaction Reports totaling over $400 million, listing nominal account holders instead. Sze pleaded guilty in February 2022 to coordinating a $653 million money laundering conspiracy, operating an unlicensed money transmitting business, and bribing bank employees.⁷³

A second network laundered nearly $120 million through shell accounts tied to a “high-risk” jewelry business between March 2021 and March 2023. A third recruited five TD Bank employees who opened dozens of shell-company accounts, issued more than 600 debit cards, and facilitated over 120,000 ATM withdrawals in Colombia, laundering about $39 million by overriding internal controls and lifting freezes on flagged accounts. One employee accepted bribes as low as $500 per account.⁷⁹

The Asset Cap and Other Restrictions

The money is only part of what TD lives with now. The OCC issued a cease and desist order capping the combined consolidated assets of TD Bank, N.A. and TD Bank USA, N.A. at roughly $434 billion, the level reported on September 30, 2024. The bank cannot open new branches, add products or services, or enter new markets without prior written OCC approval. If it misses compliance deadlines, the OCC can force it to shrink its assets by up to 7% per year. The cap has no defined end date and stays in place until the OCC decides deficiencies are resolved.¹⁰¹¹

FinCEN imposed a four-year independent monitorship covering a historical review of missed Suspicious Activity Reports, an accountability review of personnel involvement, and a data governance review. The DOJ plea agreement adds a separate three-year independent compliance monitor.³² The Federal Reserve separately required TD to relocate its U.S.-facing compliance function to the United States, stand up a dedicated U.S. remediation office, and certify sufficient remediation resources before declaring dividends or repurchasing shares.¹²

TD spent $507 million on Bank Secrecy Act and AML remediation in fiscal 2025 and projected similar spending for 2026. As of December 2025, the bank said it had completed “the majority” of its U.S. management remediation actions, but no timeline for lifting the asset cap has been set.¹³

Leadership Changes and Executive Pay Cuts

CEO Bharat Masrani, who said the AML challenges “took place on my watch” and accepted “full responsibility,” accelerated his retirement to February 1, 2025 and stayed in an advisory role through July 2025. Raymond Chun, previously chief operating officer, became Group President and CEO on February 1, 2025. The board announced the retirement of five directors, nominated four new ones, and said Board Chair Alan MacGibbon would leave by the end of 2025. A new Remediation Committee was formed to oversee the compliance overhaul.¹⁴¹⁵

The bank cut variable compensation for 41 executives by a total of $30 million. Masrani’s 2024 total direct compensation dropped 89%, from $13.3 million in 2023 to $1.5 million, with no cash incentive or equity award. All other Senior Executive Team members saw variable pay reduced by at least 25%.¹⁵

Who Has Been Charged

More than two dozen individuals were charged across the three money laundering schemes.⁷ Among the TD Bank insiders who pleaded guilty in early 2026:

Wilfredo Aquino, a former New York assistant store manager, pleaded guilty January 6, 2026 to conspiring to launder monetary instruments. He admitted processing about 1,680 official bank checks totaling over $92 million for the Sze network and receiving over $11,000 in gift cards. Sentencing was set for May 12, 2026.¹⁶
Oscar Marcel Nunez-Flores, a former Scotch Plains, New Jersey employee, pleaded guilty January 21, 2026 to money laundering conspiracy and receiving bribes. He helped move more than $26 million to Colombia by opening shell-company accounts and issuing over 600 debit cards. Sentencing was set for May 27, 2026.⁹
Leonardo Ayala, a former Homestead, Florida employee, pleaded guilty January 28, 2026 to money laundering conspiracy and receiving bribes. Sentencing was set for June 11, 2026.¹⁷

No senior executives had been charged as of early 2026. Senators Ron Wyden and Elizabeth Warren sent TD Bank a December 2024 letter demanding internal records on the Sze network and criticized the lack of consequences for high-level leaders, pointing to federal court records indicating that the head of TD’s U.S. Financial Intelligence Unit had received reports in 2020 flagging $8.3 million in checks as “substantial outliers” without further investigation.¹⁸¹⁹

A Separate Overdraft Fee Settlement

If you’re a TD customer looking for a payout, the AML case does not pay consumers. A separate class action, Burns, et al. v. TD Bank, N.A. (Case No. 1:21-cv-18194, D.N.J.), resolved allegations that the bank charged overdraft fees on debit card transactions authorized when the account had a positive balance but settled after the balance had dropped below zero. TD denied wrongdoing. The court granted final approval of a $32.225 million settlement on October 15, 2024. Of that, $21.975 million funded cash payments for consumers who paid the disputed fees between June 27, 2019 and September 30, 2022, and $10.25 million was allocated to forgiving outstanding balances on closed accounts. No claim form was required; current account holders received credits and former customers received checks, with disbursement anticipated in mid-March 2025.²⁰²¹

1
U.S. Department of Justice. United States of America v. TD Bank, N.A.
2
Gibson Dunn. TD Bank U.S. Holding Company Plea Agreement
3
FinCEN. FinCEN Assesses Record $1.3 Billion Penalty Against TD Bank
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OCC. OCC Issues Cease and Desist Order and $450 Million Penalty Against TD Bank
5
Federal Reserve. Federal Reserve Board Enforcement Action Against Toronto-Dominion Bank
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TD Bank Group. TD Bank Group Reports Fourth Quarter and Fiscal 2024 Results
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Courthouse News Service. TD Bank To Pay $3 Billion for Allowing Drug Cartels To Launder Money
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CNN. TD Bank Settlement Money Laundering
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U.S. Department of Justice. TD Bank Insider Pleads Guilty to Facilitating Colombian ATM Money Laundering Scheme
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OCC. OCC Consent Order AA-ENF-2024-77
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American Banker. TD Bank Settlement Shows That Asset Caps Are Here To Stay
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Federal Reserve. Federal Reserve Consent Cease and Desist Order
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American Banker. TD Has Completed Majority of U.S. AML Remediation
14
TD Bank Group. TD Bank Group Announcement
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TD Bank Group. TD Bank Group Accelerates CEO Transition, Announces Board Changes
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IRS Criminal Investigation. TD Bank Insider Pleads Guilty to Facilitating Money Laundering
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U.S. Department of Justice. Former TD Bank Employee Pleads Guilty to Accepting Bribes, Laundering $5.5 Million to Colombia
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U.S. Senate Committee on Finance. Wyden, Warren Question TD Bank on Money Laundering Scheme Involving Chinese Fentanyl Trafficking
19
Forbes. New Developments in TD Bank Money Laundering Case
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Top Class Actions. $32.225M TD Bank Overdraft Fee Class Action Settlement
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TD Bank APSN Fee Class Action. Burns v. TD Bank Settlement FAQ