When you think of a bank, you imagine a place of trust and responsibility. But for nearly a decade, TD Bank, the U.S. branch of Canada’s Toronto-Dominion Bank, played a very different role. This major bank didn’t just fail to prevent crime—it actively became a gateway for some of the worst criminal activities imaginable, including human trafficking, drug dealing, and Ponzi schemes.

The scale of lawbreaking was massive. Between 2014 and 2023, TD Bank allowed over half a billion dollars to be laundered through its accounts. This wasn’t a minor oversight; it involved blatant violations of laws designed to prevent money laundering. The criminals didn’t even try to hide their actions. One man, Da Ying Sze, nicknamed “David,” deposited more than $1 million in cash at a single branch in one day. Bank employees were so alarmed that one asked, “How is this not money laundering?” The response: “Oh, it 100% is.”

What Happened Next?

After years of investigation, the U.S. Department of Justice (DOJ) and the Financial Crimes Enforcement Network (FinCEN) finally took action. On October 10, 2024, TD Bank admitted guilt, agreeing to pay over $3 billion in fines and penalties—the largest penalty for money laundering in U.S. history. The bank also pleaded guilty to conspiring to violate anti-money-laundering laws.

The punishment doesn’t stop there. TD Bank has been barred from growing beyond its current size of $434 billion in assets until it cleans up its act. It’s also forbidden from opening new branches or offering new services without strict government oversight.

How Did This Happen?

TD Bank’s slogan is “America’s Most Convenient Bank,” but it has become too convenient—especially for criminals. The bank prioritized growth and customer service over compliance with anti-money laundering laws. Senior executives and board members were aware of the issues, but little was done to fix them.

For instance, even after the bank flagged suspicious accounts, they were often kept open. One network of criminals processed $168 million through flagged accounts simply because the bank delayed closing them.

Why the Settlement Isn’t Enough

Critics argue that this settlement doesn’t go far enough. Despite the massive fine, TD Bank’s top executives—the people responsible for overseeing this mess—have faced no criminal charges. So far, only two low-level employees have been charged.

Senator Elizabeth Warren called out the DOJ, stating that letting executives off the hook sends the wrong message: that big banks can buy their way out of trouble with hefty fines. She demanded that Attorney General Merrick Garland explain why TD Bank’s leaders haven’t been charged.

In response, Garland promised ongoing investigations and hinted that more charges could follow. However, history shows that big banks rarely face meaningful consequences for their actions.

A Pattern of Misconduct

This isn’t TD Bank’s first scandal. In recent years:

• In 2020, it paid $122 million for illegally charging overdraft fees to 1.4 million customers.
• In 2022, it settled a $1.2 billion lawsuit for its role in a $7-billion Ponzi scheme.
• In 2017, it secretly created accounts for customers without their consent, similar to Wells Fargo’s infamous scandal.

Despite repeated fines and penalties, TD Bank’s leadership has remained largely untouched.

What Happens Now?

TD Bank’s CEO, Bharat Masrani, admitted responsibility, saying, “These failures took place on my watch.” He apologized and announced plans to step down in April 2024. His successor, Raymond Chun, has been with the bank since 1992, raising questions about whether the culture will truly change.

The bank’s board of directors has also come under scrutiny. Of the 14 board members, 11 were in place during the years of rampant money laundering. Yet none have stepped down, and their annual stipends remain untouched.

The Bigger Picture

TD Bank’s case is just one example of a larger problem. Over the last 25 years, the six largest U.S. banks have paid over $207 billion in fines for various violations. Yet, their executives rarely face consequences.

Critics like Dennis Kelleher, CEO of Better Markets, argue that this lack of accountability allows corporate crime to persist. He noted that even though TD Bank’s fine is a win for ordinary Americans, letting its leaders go unpunished undermines the justice system.

The TD Bank scandal raises serious questions about how financial institutions are regulated. Will the penalties be enough to change the culture of greed and negligence? Or will it be business as usual, with banks continuing to prioritize profits over ethics?

As the DOJ’s investigation continues, the public is left wondering: Who will be held accountable for enabling criminals to profit while ordinary citizens pay the price?