Karsten Wenzlaff, Advisor
August 26th, 2025
Karsten Wenzlaff is a Crowdfunding and Fintech Expert from Germany. He is Secretary-General of Digit[...]
TD Bank Scandal Update: $3B Fine, Arrests, and Scrutiny
AML | Dec 18, 2024
Image: Pixabay/Alexandra Koch
TD Bank Under Pressure as ex-Employee Arrested and U.S. Senators Demanding Answers
Back in May 2024, the TD Bank money-laundering scandal hit wires with the CEO Bharat Masrani departing amid a monstrous $3B fine. Yes, that's the same TD Bank Chief that was seeking a level playing field with startup fintechs back in 2016. In October 2024, TD Bank pleaded guilty to violating U.S. anti-money laundering laws and agreed to pay over $3 billion in penalties, the largest fine ever in AML regulations. The bank also received an asst cap of approx $434 billion that restricts growth in U.S. operations until AML deficiencies meet regulatory requirements.
See: 4 AML Challenges for 2024 and Beyond
Since then, as reported in the Wall Street Journal, U.S. Senators Ron Wyden and Elizabeth Warren have written to TD’s Bharat Masrani asking for clarity on what bank executives knew and how they responded to a scheme that laundered over $470 million of drug sales through the Canadian bank, raising accountability questions.
Former TD Employees Arrested
While Da Ying Sze was the mastermind behind the $470 million laundering scheme, he was external to the bank and exploited the bank's vulnerabilities. In February 2022, Sze (also called David) pleaded guilty to multiple money laundering related charges and worked with at least 3 now arrested former TD Bank employees who facilitated.
- The first arrest took place in March 2024. Gerardo Aquino who worked at a branch in Hollywood, Florida was charged with taking bribes to open fake accounts that were used to transfer millions of dollars to Colombia, bypassing AML safeguards.
- The second arrest was in November 2024. Daria Sewell who worked in TD Bank's AML department in Manhattan, New York was charged with stealing personal customer data, and sharing this information on Telegram, which was used to bypass the bank's compliance efforts.
- The latest arrest came in December 2024, when Leonardo Ayala, a former employee in Doral, Florida who accepted bribes to issue debit cards and set up shell accounts that criminals used to launder money through the bank.
See: Elliptic Publishes New Research on AI and Money Laundering
According to the WSJ article, TD Bank employees flagged Da Ying Sze’s suspicious activity - some even joking about it in emails. One store manager warned a colleague, “You guys really need to shut this down LOL,” while another expressed concern that tellers felt uncomfortable handling the transactions. Higher-level executives were also aware of the risks. Senators are questioning the bank's accountability and how much executives knew about what was going on.
TD Bank's Repsponse
Spokesperson said:
“We appreciate the concerns expressed by Senators Warren and Wyden. TD has taken full responsibility for its AML [anti-money-laundering] program failures and is making significant investments and enhancements to meet regulatory obligations and help protect the financial system.”
Canadian Regulatory Response
In response, the Canadian government has proposed stronger anti-money laundering rules including tougher penalties, criminal charges for providing false information, and expanded powers for FINTRAC. The Fall Economic Statement (FES) of December 2024 included these changes but this year's FES was largely derailed by Chrystia Freeland, Canada's Finance Ministers' sudden resignation.
Closing
TD Bank’s AML scandal has adversely impacted the bank's financial performance and reputation. Fourth quarter profits fell short of expectations prompting a suspension of mid-term financial growth targets. More likely to come...
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