U.S. Case Reveals TD Bank's Role in Laundering $670 Million Through $18 Trillion Unmonitored Transactions, Hit with Record $3 Billion Fine

WASHINGTON, United States — In a historic crackdown on criminality that reached into the upper echelons of Canadian banking operations in the United States, the U.S. Department of Justice has unveiled a case against TD Bank spanning nearly a decade. Officials revealed that the bank allowed approximately $18.3 trillion to flow through its systems unchecked between January 2014 and October 2023, facilitating money laundering activities for Colombian drug traffickers and three major money laundering networks, including a Chinese crime group operating in New Jersey.

These networks collectively laundered over $670 million through TD Bank's accounts.

During this period, TD Bank failed to monitor 92 percent of its transaction volume, resulting in over 14.6 billion unmonitored transactions, encompassing a range of high-risk activities. The case has delivered a serious blow to TD Bank's U.S. expansion efforts and raises critical questions about regulatory oversight in Canada, where some experts argue that gaps in enforcement allowed such lapses to persist.

“TD Bank created an environment that allowed financial crime to flourish. By making its services convenient for criminals, it became one,” U.S. Attorney-General Merrick Garland said at a news conference in Washington.

Some experts contend that Canada’s regulatory environment has become a haven for international crime.

On Friday, Marc Cohodes, a U.S. investor known for exposing financial misconduct, told The Bureau: "The amount of financial crime going on in Canada right now is far greater than the mind can comprehend. It involves housing, mortgages, and illicit funds flowing in from European, Chinese, and South American networks into Canada's financial systems. The way Canada is welcoming third-world criminals and their funds risks turning it into a third-world enterprise."

Cohodes said he believes Canada’s government has a “dire and urgent need” to address the reputational harm to the nation stemming from the TD case, and other issues, like casino and real estate money laundering in British Columbia, that Cohodes began publicly commenting on in 2015.

TD Bank's guilty plea to conspiring to commit money laundering marks the first time a major U.S. bank has admitted such a charge. As part of the settlement, TD Bank will pay $3 billion in penalties, the largest ever for failing to maintain a compliant anti-money-laundering program. This settlement includes fines directed to the Department of Justice, the Financial Crimes Enforcement Network, and U.S. banking regulators. Additionally, a rare asset cap imposed by the Office of the Comptroller of the Currency restricts TD Bank from expanding in the U.S. without regulatory approval.

The bank's failure to act on repeated warnings from regulators, internal audits, and third-party consultants allowed criminal organizations to exploit its systems. The fallout has significantly impacted TD's leadership, including CEO Bharat Masrani, who announced his retirement amid the scandal.

Central to the case is Da Ying Sze, known to TD Bank employees as "David."

From January 2018 to February 2021, David and his associates moved approximately $474 million through TD Bank’s branches in New Jersey, New York, Pennsylvania, Maine, and Florida. Prosecutors noted that David chose TD Bank for its lax oversight, finding it easier to transfer large sums through its accounts compared to other institutions. Surveillance footage from July 2020 captures the audacity of these operations: David is seen conducting a $372,000 cash transaction at a midtown New York TD Bank branch using accounts that were not in his name. On the same day, he completed another $290,000 cash transaction at a different branch, purchasing 14 official bank checks.

In February 2021, a TD Bank employee questioned how David's network had managed to purchase over $1 million in official bank checks with cash in a single day, asking, “How is that not money laundering?” A colleague replied, “Oh, it 100 percent is.” Earlier that month, a store manager had warned regional managers, saying, “It is getting out of hand, and my tellers are at the point that they don’t feel comfortable handling these transactions.”

The dismissive attitude throughout TD’s offices wasn't isolated.

“You guys really need to shut this down LOL,” a TD branch manager wrote to another manager in August 2020, referring to David's activities. On TD’s internal messaging platform, a compliance employee asked, “Why all the really awful ones bank here lol,” to which a colleague replied, “Because … we are convenient,” a nod to the bank’s slogan, “America’s Most Convenient Bank.” The Department of Justice did not disclose the names of the employees involved in these conversations.

In February 2022, David pleaded guilty to laundering over $653 million, facing charges that included operating an unlicensed money-transmitting business and bribing bank employees to facilitate these activities.