# TD Bank pleads guilty after excluding 92% of US transaction volume from its automated AML monitoring

Source: https://www.bankingnewsai.com/ai-incidents/td-bank-us-2024-automated-aml-monitoring-guilty-plea
Last updated: Oct 22, 2026

TD Bank, N.A. and The Toronto-Dominion Bank (TD Bank Group) · Governance finding · severity 5 of 5

On 10 October 2024 TD Bank, N.A. and its US holding company pleaded guilty to Bank Secrecy Act and money-laundering conspiracy charges. Per the U.S. Department of Justice, TD Bank intentionally excluded all domestic ACH transactions, most check activity and other transaction types from its automated transaction monitoring system, leaving 92% of transaction volume, about $18.3 trillion, unmonitored from January 2018 to April 2024, and added no new monitoring scenarios from 2014 through 2022. The failures let three laundering networks move more than $670 million. With FinCEN, OCC and Federal Reserve actions, penalties totalled about $3.09 billion, plus a US asset cap and monitors. TD Group's chief executive said the bank took "full responsibility". Authorities described an automated monitoring system, not AI.

## Key facts

|  |  |
| --- | --- |
| Date | Oct 10, 2024 |
| Institution | TD Bank, N.A. and The Toronto-Dominion Bank (TD Bank Group) |
| Country | United States |
| AI system | Automated transaction monitoring system (rules-based scenarios) for anti-money-laundering; not described as AI |
| AI? | Automated system not described as AI — The system was automated, but neither the institution nor a regulator described it as AI; it is listed because it is routinely discussed as an AI failure. |
| Category | Regulatory finding (Governance finding) |
| Status | Settled |
| Severity | 5 of 5 — Rubric 5 (criminal, systemic): a criminal guilty plea, about $3.09bn in combined penalties, an asset cap and monitorships, after monitoring gaps let money-laundering networks move more than $670m through the bank. |

## What happened?

According to the Justice Department, from January 2014 to October 2023 TD Bank had "long-term, pervasive, and systemic deficiencies" in its US anti-money-laundering controls while senior executives enforced a "flat cost paradigm" budget mandate. Regulators and the bank's own internal audit repeatedly raised concerns about its transaction monitoring program, yet from 2014 through 2022 the program "remained effectively static". [1][2]

The DOJ's case summary states that TD Bank "intentionally excluded all domestic automated clearinghouse (ACH) transactions, most check activity, and numerous other transaction types from its automated transaction monitoring system, resulting in 92% of total transaction volume going unmonitored from Jan. 1, 2018, to April 12, 2024", about $18.3 trillion of activity. The bank added no new monitoring scenarios and made no material changes to existing ones from at least 2014 through late 2022, and launched products such as Zelle without appropriate monitoring coverage. [1][2]

These failures enabled three money-laundering networks to move more than $670 million through TD Bank accounts between 2019 and 2023, one of them assisted by five bank employees, according to the DOJ. FinCEN found the bank willfully failed to file suspicious activity reports on thousands of suspicious transactions totalling about $1.5 billion; the OCC found "significant, systemic breakdowns in its transaction monitoring program". [1][3][4]

TD Bank, N.A. pleaded guilty to conspiring to fail to maintain a compliant AML program, fail to file accurate currency transaction reports and launder money; its parent TD Bank US Holding Company pleaded guilty to related charges. The resolution was coordinated with FinCEN, the OCC and the Federal Reserve. CBC News and Banking Dive reported combined penalties of about $3.09 billion. [1][7][8]

## Timeline

- Jan 1, 2018 — Start of the period (to 12 April 2024) in which, per the DOJ, 92% of TD Bank's transaction volume went unmonitored by its automated system. [2]
- Oct 2023 — End of the period (from January 2014) in which, per the DOJ, TD Bank had long-term, systemic AML deficiencies; it added no new monitoring scenarios from at least 2014 through late 2022. [1]
- Oct 10, 2024 — TD Bank pleads guilty; the DOJ ($1.89bn forfeiture and fine), FinCEN ($1.3bn), the OCC ($450m penalty, cease-and-desist order and asset cap) and the Federal Reserve ($123.5m) announce coordinated actions. [1][3][4][5][8]

## What was the impact?

- Financial: About $3.09 billion in combined penalties: DOJ forfeiture of $452.4m and criminal fine of $1.43bn ($1.89bn total), FinCEN $1.3bn, OCC $450m, Federal Reserve $123.5m (the DOJ credits $123.5m of its forfeiture toward the Fed's resolution)
- Other: About $18.3 trillion (92% of transaction volume) went unmonitored from January 2018 to April 2024; three laundering networks moved more than $670 million; FinCEN found unfiled SARs on transactions totalling about $1.5 billion. The OCC capped the assets of TD's two US banks at $434 billion. [1][2][3][6][7][8]

## How did TD Bank, N.A. and The Toronto-Dominion Bank (TD Bank Group) respond?

TD Bank Group said it had reached a resolution totalling approximately US$3.09 billion and would remediate its US AML program under a monitorship. Group chief executive Bharat Masrani said: "We have taken full responsibility for the failures of our U.S. AML program and are making the investments, changes and enhancements required to deliver on our commitments. This is a difficult chapter in our Bank's history. These failures took place on my watch as CEO and I apologize to all our stakeholders." The bank said it had appointed new US leaders and overhauled its US AML team. [6][7]

## What was the outcome?

TD Bank agreed to an independent compliance monitor for three years under the DOJ plea and a four-year FinCEN monitorship, including a SAR lookback and, for the first time, accountability and data-governance reviews. The OCC's cease-and-desist order caps the combined assets of TD Bank, N.A. and TD Bank USA, N.A. at $434 billion and requires remediation of the BSA/AML program, including validation of data inputs to automated monitoring systems. The DOJ has charged more than two dozen individuals across the laundering schemes, including bank insiders. [1][3][5][6]

## FAQ

### Was TD Bank's transaction monitoring an AI system?

No. The Justice Department, FinCEN and the OCC describe an automated, scenario-based transaction monitoring system. The failure was in what the bank chose to feed it and how little it was updated: whole transaction types such as domestic ACH and most checks were excluded, and no new scenarios were added from 2014 through 2022.

### How much went unmonitored?

Per the DOJ, about 92% of TD Bank's total transaction volume, roughly $18.3 trillion, went unmonitored by its automated system from 1 January 2018 to 12 April 2024. FinCEN said trillions of dollars in transactions a year went unmonitored for potentially suspicious activity.

### What penalties did TD Bank face?

About $3.09 billion in total: $1.89 billion to the DOJ in forfeiture and a criminal fine, $1.3 billion to FinCEN, $450 million to the OCC and $123.5 million to the Federal Reserve, with some credits between them. The OCC also capped the assets of TD's two US banks at $434 billion, and the bank must work under independent monitors.

### Did TD Bank admit wrongdoing?

Yes. TD Bank, N.A. and its US holding company pleaded guilty to criminal charges, and in the FinCEN settlement the bank admitted it willfully failed to maintain a compliant AML program. Group chief executive Bharat Masrani said the bank took full responsibility and apologised to stakeholders.

## Sources

1. [TD Bank Pleads Guilty to Bank Secrecy Act and Money Laundering Conspiracy Violations in $1.8B Resolution](https://www.justice.gov/archives/opa/pr/td-bank-pleads-guilty-bank-secrecy-act-and-money-laundering-conspiracy-violations-18b) — U.S. Department of Justice, Oct 10, 2024 (official): "Throughout this time, TD Bank intentionally did not automatically monitor all domestic automated clearinghouse (ACH) transactions, most check activity, and numerous other transaction types, resulting in 92% of total transaction volume going unmonitored from Jan. 1, 2018, to April 12, 2024."
2. [United States of America v. TD Bank, N.A.](https://www.justice.gov/criminal/case/united-states-america-v-td-bank-na) — U.S. Department of Justice, Oct 10, 2024 (court): "Throughout this time, TD Bank intentionally excluded all domestic automated clearinghouse (ACH) transactions, most check activity, and numerous other transaction types from its automated transaction monitoring system, resulting in 92% of total transaction volume going unmonitored from Jan. 1, 2018, to April 12, 2024."
3. [FinCEN Assesses Record $1.3 Billion Penalty against TD Bank](https://www.fincen.gov/news/news-releases/fincen-assesses-record-13-billion-penalty-against-td-bank) — Financial Crimes Enforcement Network, Oct 10, 2024 (official): "As a result of these failures, TD Bank allowed trillions of dollars in transactions annually to go unmonitored for potentially suspicious activity that would require reporting to FinCEN."
4. [OCC Issues Cease and Desist Order, Assesses $450 Million Civil Money Penalty, and Imposes Growth Restriction Upon TD Bank, N.A. for BSA/AML Deficiencies (NR 2024-116)](https://www.occ.gov/news-issuances/news-releases/2024/nr-occ-2024-116.html) — Office of the Comptroller of the Currency, Oct 10, 2024 (official): "The OCC found that the bank had significant, systemic breakdowns in its transaction monitoring program."
5. [Consent Order, In the Matter of TD Bank, N.A. and TD Bank USA, N.A. (AA-ENF-2024-77)](https://www.occ.gov/static/enforcement-actions/eaAA-ENF-2024-77.pdf) — Office of the Comptroller of the Currency, Oct 10, 2024 (official): "WHEREAS, the Bank has pursued growth without ensuring that it had established and maintained an adequate BSA/AML Program"
6. [TD Bank Group Announces Resolution of AML Investigations](https://stories.td.com/us/en/article/td-bank-group-announces-resolution-of-aml-investigations) — TD Bank Group, Oct 10, 2024 (official): "We have taken full responsibility for the failures of our U.S. AML program and are making the investments, changes and enhancements required to deliver on our commitments."
7. [TD Bank fined $3B US after pleading guilty in historic U.S. money-laundering case](https://www.cbc.ca/news/business/td-bank-money-laundering-1.7348819) — CBC News, Oct 10, 2024 (news)
8. [TD hit with asset cap, $3B in penalties over AML woes](https://www.bankingdive.com/news/td-asset-cap-3b-penalty-aml-woes-doj-occ-fed-fincen/729506/) — Banking Dive, Oct 10, 2024 (news)

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