TD Bank Probe Tied to Laundering of Illicit Fentanyl Profits

A US Department of Justice (DoJ) investigation into TD Bank ( TD ) is focused on how Chinese drug traffickers and crime groups used Canada's second-largest lender to launder their money from fentanyl sales. The bank disclosed last year that it was cooperating with authorities in an investigation into its anti-money laundering compliance program by the DoJ. The investigation was initiated after agents uncovered an operation in New York and New Jersey that laundered hundreds of millions of dollars in proceeds from illicit narcotics through TD and other banks.

TD Bank ( TD ) and the DoJ did not immediately respond to Journalist requests for comment. Canada's anti-money laundering agency imposed its biggest-ever penalty of nearly C$9.2 million ($6.71 million) on TD Bank ( TD ) over non-compliance of anti-money laundering regulations. Toronto-Dominion Bank ( TD ) also faces probes by three US regulators over its handling of suspicious customer transactions. The bank has set aside an initial $450 million with respect to just one of those regulatory probes, but it can't estimate the final size of any fines or other penalties it might face tied to the anti-money-laundering investigations.

The Wall Street Journal reported that the US Department of Justice launched an investigation after discovering evidence of a drug-money-laundering operation in New York and New Jersey. There are allegations that the criminals bribed Toronto-Dominion employees in that case and at least one other. Toronto-Dominion disclosed last year that it was under investigation by the department. Canada's second-largest lender also faces probes by three US regulators over its handling of suspicious customer transactions. The bank has set aside an initial $450 million concerning just one of those regulatory probes, noting that it can't estimate the final size of any fines or other penalties it might face tied to the anti-money-laundering investigations.

Toronto-Dominion's shares dropped after the Journal report Thursday afternoon and closed down 1.7% afterward during Friday trading session, Toronto-Dominion Bank ( TD ) stock was down 6%. The bank has been and continues to cooperate with law enforcement and regulators, and a comprehensive effort is underway to strengthen its anti-money laundering program, including investments in talent, tools, and technology.