TD Bank fined $3 billion over drug cartel money laundering scandal

Staff “openly joked” about skirting the rules on several occasions, Garland said, with TD choosing “profits over compliance in order to keep its costs down.”

“Worst Case”

TD is the largest bank to admit to violating the US Bank Secrecy Act, he said.

The asset limit that U.S. authorities have imposed on TD is reserved for the most serious cases and is a major blow to the ambitions of Canada’s second-largest bank to expand further in the U.S., which accounts for about third of their income.

It represents a “worst-case scenario” for TD, according to Cormark Securities analyst Lemar Persaud. The bank had already set aside $3 billion for the fine.

The federal investigations into TD led to “significant underperformance of (its) stock and, we believe, the retirement of current CEO Bharat Masrani,” Persaud said.

Federal authorities reportedly began investigating TD’s internal controls after agents discovered that a Chinese criminal operation bribed employees and brought large bags of cash to branches to launder millions of dollars in fentanyl sales through TD branches in New York and New Jersey.

US officials are increasingly concerned about Mexican cartels’ use of the US banking system to launder proceeds from the sale of fentanyl and other drugs that kill tens of thousands of Americans each year, according to CNN.

TD has spent millions to bolster its compliance programs, laid off dozens of staff at its U.S. branches and named Ray Chun as its new chief executive, moving his leadership away from the money-laundering scandal.