Between 2014 and 2023, TD Bank faced serious allegations of having "long-term, pervasive, and systemic deficiencies" in its U.S. anti-money laundering (AML) policies, according to court documents. Despite multiple warnings from regulators and its internal audit group, the bank failed to take appropriate remedial action.

As a result, TD Bank’s transaction monitoring system remained "effectively static," leaving a vast majority of its transaction volume — an estimated 92%, or $18.3 trillion — unmonitored, including domestic ACH transactions and cheque activity. This oversight also extended to new services like Zelle, raising concerns about the bank’s role in facilitating financial crimes.

The Department of Justice (DoJ) revealed that between 2019 and 2023, three money laundering networks successfully moved over $670 million through TD Bank accounts. One network alone processed over $470 million through nominee accounts, incentivizing employees with gift cards to turn a blind eye to the suspicious transactions. Attorney General Merrick Garland emphasized the severity of the situation, stating that TD Bank "became convenient for criminals" and now faces historical consequences for its inaction.

As part of its penalties, TD Bank will pay $1.8 billion to the U.S. Justice Department, with additional fines imposed by banking regulators and the Financial Crimes Enforcement Network. The bank will also implement a compliance monitor for three years. CEO Bharat Masrani acknowledged the bank’s failures, taking full responsibility and apologizing to stakeholders. He vowed that the necessary investments and changes are being made to rectify the bank’s U.S. compliance program.