At a press event this afternoon, U.S. Attorney General Merrick Garland said TD Bank is the largest bank in U.S. history to plead guilty to Bank Secrecy Act failures, and the first bank in history to plead guilty to money laundering conspiracy to commit money. “By making his services suitable for criminals, it became one,” he said.

A statement from FinCEN called the $1.3 billion settlement “the largest fine against a depository institution in the history of the U.S. Treasury Department and FinCEN.” From January 2014 to October 2023, TD Bank had “longstanding, pervasive and systemic deficiencies in its U.S. AML policies, procedures and controls,” the Justice Department statement said, “but failed to take appropriate corrective actions.”

Senior executives at TD Bank enforced a budget mandate, internally referred to as a “flat cost paradigm,” that required TD Bank’s budget not to 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, regulators say fundamental and widespread deficiencies in its AML program made TD Bank an “easy target” for perpetrators of financial crimes.

This resulted in approximately $18.3 trillion in transaction activity between January 1, 2018 and April 12, 2024, which went unaudited, according to the statement. According to employees cited in the DOJ statement, these failures made it “easy” for criminals, allowing three money laundering networks to collectively transfer more than $670 million through TD Bank accounts between 2019 and 2023. From January 2018 to February 2021, one money laundering network processed more than $470 million through the bank via large cash deposits into nominees’ accounts.

As part of the settlement, TD Bank admitted, according to the FinCEN statement, that it willfully failed to implement and maintain an AML program that met the minimum requirements of the BSA and FinCEN’s implementing regulations. FinCEN says the investigation found that TD Bank knew its AML program was flawed. Among other failures, TD Bank processed transactions on Venmo and Zelle that were “indicative of human trafficking” and, as a result of the deficiencies, “failed to identify and timely report these transactions” to the regulator.

“The vast majority of financial institutions work with FinCEN to protect the integrity of the U.S. financial system. TD Bank did the opposite,” Deputy Treasury Secretary Wally Adeyemo said in the statement. “From fentanyl and narcotics trafficking to terrorist financing and human trafficking, TD Bank’s chronic failures have provided fertile ground for a host of illegal activities to infiltrate our financial system.”