By james art U.S. Sen. Elizabeth Warren, pictured here at the Democratic National Convention in Chicago this year, says the U.S. Justice Department has failed to hold TD Bank executives accountable for anti-money laundering failures.Mike Segar/Reuters
US Senator Elizabeth Warren is calling out the Justice Department for failing to hold Toronto-Dominion Bank executives accountable for anti-money laundering failures.
In early October, TD became the first bank in U.S. history to plead guilty to conspiracy to commit money laundering, leading to rare penalties by U.S. authorities. In a letter Wednesday to the Justice Department, Ms. Warren said that while the law enforcement agency and bank regulators had imposed serious fines and restrictions, they had failed by failing to directly charge the bank’s top executives.
The Justice Department has allowed “this rogue bank and its reckless leadership to escape the full scope of penalties that Congress has determined are necessary to effectively deter future criminal activity,” Mr. Warren said in the letter.
“TD Bank executives allowed TD Bank to operate as a criminal slush fund and hurt hundreds of thousands of people. The details of this crime are impressive,” Ms Warren said. “Between January 2014 and October 2023, TD Bank’s management knowingly ran a criminally inadequate anti-money laundering program while growing the bank so that its “risk profile increased[ed] significantly.’
The letter, addressed to DOJ Attorney General Merrick Garland and Deputy Attorney General Lisa Monaco, was first reported by American Banker.
When the DOJ revealed the charges against TD, the agency said it was prosecuting two TD Bank employees and that more charges could be forthcoming. “No one involved in TD Bank’s illegal conduct will be banned,” Mr. Garland said.
Asked by a reporter whether the Justice Department expected to prosecute any TD executives, Mr. Garland said he could not comment on the ongoing investigation but that “it is continuing aggressively and we expect to see more prosecutions.”
“Until and unless those executives who ran TD Bank’s institutionalized money laundering are held accountable, banks will continue to factor enforcement fines into the cost of doing business rather than approach compliance with our money laundering laws of money with due seriousness,” Mme. Warren said.
She also said prosecutors allowed TD to avoid criminal charges that would have triggered a “death penalty” banking provision that gives the Office of the Comptroller of the Currency (OCC) the power to revoke a lender’s charter, forcing it to end its American operations.
“Simply put, if (the DOJ) had charged TD Bank with the crime it committed — money laundering — the OCC would have been legally required to serve TD Bank with a notice of intent to terminate the bank’s charter and hold a hearing in public to discuss the grounds for revoking the charter,” Ms Warren said.
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The senator asked several questions of the Justice Department, including a request for reasons why the agency did not charge senior executives, and demanded a response by Nov. 15.
we have an ongoing investigation. We now have the cooperation and assistance of the bank that has conducted investigations of individuals. I cannot comment on the ongoing investigation, but it is continuing aggressively and we expect to see more prosecutions.
TD and DOJ declined a request for comment from The Globe.
U.S. officials have imposed more than $3 billion in fines and numerous non-monetary penalties for violations of TD’s anti-money laundering program between January 2014 and October 2023 — a period spanning CEO Bharat Masrani’s tenure .
Mr Masrani said he took responsibility for the lapses. In September, the bank announced that the CEO would step down next year.
Canada’s banking regulator, the Office of the Superintendent of Financial Institutions, previously said the details of the case were “serious.”
Last week, Prime Minister Justin Trudeau said the federal government was “very concerned” about the problems that led to TD’s agreement with US authorities.
“We are making sure that there is full accountability for those responsible for this atrocity in the United States,” Mr. Trudeau said during question period in the House of Commons last Wednesday in response to a question from an opposition member.