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Column: A huge bank pleaded guilty to conspiring to launder money, so why weren't top executives charged?
By any measure, the lawbreaking by the U.S. subsidiary of Canada’s Toronto-Dominion Bank was spectacular.
The bank, which goes by the name TD Bank in the U.S., facilitated the laundering of more than a half-billion dollars by human traffickers, fentanyl dealers, a major Ponzi schemer and others. It failed to file legally mandated reports of suspicious transactions even though one of the launderers had deposited and withdrawn “more than $1 million in cash in a single day.”
All this was laid out in settlements with the Department of Justice and the Treasury Department’s Financial Crimes Enforcement Network, or FinCEN, announced on Oct. 10. The settlement will cost TD Bank more than $3 billion in penalties and includes a guilty plea to a count of conspiring to violate anti-money-laundering laws. The settlement notes sourly that the bank’s cooperation with authorities was “limited.”
A big bank engaging in criminal conduct has finally been properly punished, but failing to charge individual banking supervisors and executives is wrong and dumb.
— Dennis Kelleher, Better Markets
Noting that the bank’s slogan is “America’s Most Convenient Bank,” Atty. Gen. Merrick Garland stated, “There is something terribly wrong with a bank that knowingly makes its services convenient for criminals.”
Yet the settlement is prompting Justice Department critics to ask whether its terms are just too convenient for the bank. That’s because it lacks a critical deterrent in white collar crime cases: criminal charges against TD’s top executives who were in place while the lawbreaking was in full cry.
That was just one way that the deal allowed “this lawbreaking bank and its reckless leadership to escape the full scope of penalties … necessary to effectively deter future criminal acts,” Sen. Elizabeth Warren (D-Mass.) stated last week in a scathing letter to Garland.
The Justice Department also charged the bank with “conspiring … to launder” money rather than with money laundering itself, Warren observed — a distinction that frees the bank from a federal law that might have resulted in the loss of its banking license in the U.S.
The department’s failure to charge TD Bank’s top executives thus far, Warren wrote, is at odds with the agency’s own explicit commitment to “individual accountability,” as Deputy Atty. Gen. Lisa Monaco put it in a speech earlier this year. “Companies can only act through individuals,” she said. As of now, only two low-level TD Bank employees have been charged in the money-laundering scheme. Warren asked Garland to explain his approach to the TD Bank deal by Nov. 15.
Garland stated in announcing the settlement that his agency’s “criminal investigations into individual employees at every level of TD Bank are active and ongoing” and that he expects “more prosecutions.” He didn’t specify who was in the agency’s gunsights, but the plea agreement says the wrongdoing extended from branch-level employees, who accepted bribes to keep suspect accounts open, to “senior executive management.”
Warren is correct to point out that the failure to charge and convict the high-level executives who oversee wrongdoing, often over a period of years, is a major contributor to the persistence of corporate white collar crime. Official wrist-slaps and “wet smooches” delivered to corporate leaders by federal regulators and prosecutors are the rule, no matter how egregious the misdeed — even when it’s as bad as the Wells Fargo customer fraud.
In that case, the Securities and Exchange Commission imposed a $2.5-million penalty on John Stumpf, the bank’s ex-chairman and chief executive, who had collected about $300 million in compensation while the fraud was going on under his nose. The SEC didn’t even require him to admit his responsibility.
Over the last quarter-century, notes the corporate corruption watchdog Better Markets, the nation’s six largest banks “have been the subject of 490 legal actions against them and more than $207 billion in fines and settlements.” Nevertheless “the responsible individuals at the banks almost always walk away unpunished, with their pockets stuffed with bonus money.”
That applies to the TD Bank case. The settlement is “a big and long-overdue win for Main Street Americans and the financial system,” noted Dennis Kelleher, co-founder and CEO of Better Markets. “A big bank engaging in criminal conduct has finally been properly punished, but failing to charge individual banking supervisors and executives is wrong and dumb. “
Letting them off the hook “sends the wrong message: big banks can still buy get-out-of-jail-free cards for their executives by paying big fines and agreeing to other penalties,” Kelleher commented.
It’s true that the Justice Department and FinCEN lowered the boom on TD Bank nearly to the maximum in their power. In addition to the financial penalties, which are the largest ever imposed on a U.S. bank in a money-laundering case, the U.S. subsidiary is forbidden for now to grow beyond the $434 billion in assets it held as of Sept. 30 and is restricted from opening more branches or offering new services without government oversight. It must employ an outside compliance monitor for at least five years.
Among the casualties of the government investigation is TD Bank’s planned $13.3-billion merger with Memphis-based First Horizon Bank. The deal collapsed in May 2023 when it emerged that the money-laundering probe would obstruct government approval of the merger.
TD Bank is the tenth-largest commercial bank in the U.S., with 1,100 branches along the Eastern Seaboard from Maine to Florida. But it has been determined to grow while keeping its focus on customer relations — an ambition that regulators say led it to shortchange its anti-money-laundering programs even as it became clear that they were increasingly unable to handle the flow of suspect transactions.
TD Bank Group, the Canadian parent holding company, hasn’t downplayed the gravity of the charges.
“We have taken full responsibility for the failures of our U.S. [anti-money-laundering] program and are making the investments, changes and enhancements required to deliver on our commitments,” Bharat Masrani, CEO of the parent, said after the settlement announcement. “These failures took place on my watch as CEO and I apologize to all our stakeholders.” Masrani is scheduled to step down in April.
To assess whether the penalties levied on TD Bank are appropriate, consider the facts as set forth in the bank’s plea agreement. Money launderers exploited what they saw as holes in the bank’s anti-money-laundering practices from January 2014 through October 2023. Three illicit networks laundered more than $600 million in ill-gotten lucre through TD Bank accounts within that period.
Perhaps the most prolific launderer, according to the governments, was Da Ying Sze, who was known to bank employees as “David” and laundered some $400 million in narcotics profits at the bank.
Sze scarcely tried to conceal his activities: He would often walk into branches carrying bags of cash. It was he who would sometimes make deposits of more than $1 million a day and withdraw it almost immediately by bank checks. The bank “failed to identify Sze” in more than 500 currency transaction reports totaling about $474 million, according to FinCEN.
One day, after witnessing Sze buy more than $1 million in bank checks with cash, according to FinCEN, a branch employee asked a bank office staff member, “How is that not money laundering?” The staffer replied, “oh it 100% is.”
Sze pleaded guilty to federal money-laundering charges in 2022.
The shortcomings of its money-laundering oversight were known to the executives directly responsible for the program and to the bank’s board, the Justice Department said. The bank’s operational response was hopelessly inattentive. Accounts involved in “David’s” network, the department said, made $168.4 million in transactions even “after the Bank determined the accounts should be closed.”
As is so often the case when an institution is found to have broken the law in a major way, this isn’t TD Bank’s first walk on the wrong side. In 2020, it reached a $122-million settlement with the Consumer Financial Protection Bureau over accusations that it charged more than 1.4 million customers illegal overdraft fees. (The bank didn’t admit to the allegations, but the settlement included $97 million in customer restitution. Four years later, the CFPB ordered the bank to pay nearly $28 million for allegedly sending inaccurate negative reports about its customers to credit reporting firms. (The bank again didn’t admit guilt, but the order included about $8 million in compensation to the affected customers.)
Last year, the bank agreed to pay $1.2 billion to settle a lawsuit accusing it of involvement in a $7-billion Ponzi scheme orchestrated by conman Allen Stanford, who is now in prison. The money is earmarked to compensate victims; the bank didn’t admit liability and asserted that it merely provided Stanford’s company with conventional banking services.
In 2017, officials at the Trump-controlled Office of the Comptroller of the Currency quietly reprimanded the bank for a Wells Fargo-like scheme in which bank employees secretly created new accounts for customers or enrolled them in services without their knowledge. The agency didn’t fine the bank or even disclose its action at the time.
As for whether the government’s action will cure TD Bank of its slipshod approach to money laundering, only time will tell.
But there’s reason to wonder if it is effectively cleaning house. Under “clawback” provisions of its executive pay policies, Masrani’s pay was reduced by about $1.245 million last year to $9.55 million, an 11.3% cut from the $10.8 million he received in 2022. (Those figures are U.S. dollar equivalents although he and other executives are paid in Canadian dollars.) Further clawbacks may be imposed on his 2024 pay. His designated successor, Raymond Chun, has been with the company since 1992.
As for the board of directors, who receive annual stipends of $260,000 (Canadian) per year, none of the 14 directors other than Masrani has publicly indicated any intention to step down. Eleven were in place during the 2014-23 period, when money launderers ran rampant through the bank; the longest-serving director has been on the board since 2010. If TD Bank is to get a new broom, it’s unclear where it will come from.
Residents of Monterey Park voted overwhelmingly to ban data centers on election day, making the San Gabriel Valley city the first in the nation to do so by public vote.
As of Wednesday, 86% of votes were in favor of Measure NDC, the city ban, according to the Los Angeles County registrar-recorder/county clerk.
Other cities and towns have passed moratoriums on data centers, as a wave of opposition sweeps the country. But the Monterey Park vote can only be overturned by another ballot measure, making it the most permanent data center ban in a jurisdiction.
Monterey Park’s City Council had already banned data centers by ordinance, after a proposed 247,000-square-foot data center met an outpouring of public anger and concern. The developer withdrew that plan.
That facility would have been less than 500 feet away from the nearest home, and would have used three times the electricity of the entire 60,000-person city. Residents said it would have caused noise and air pollution and driven up electricity rates.
“This ensures long-lasting protections for current and future generations,” Amy Wong, co-founder of the group San Gabriel Valley Progressive Action, said of the vote. “It means that future city councils cannot overturn a data center ban, even if data center developers wanted to spend money to fund pro-data center candidates.”
The measure had no formal opposition. The developer of the proposed facility, investment firm HMC StratCap, said it wouldn’t engage in the ballot fight when it withdrew in March.
The Data Center Coalition, an industry trade group, expressed disappointment in the vote.
“It sends a signal that the area is closed for business, both for data centers and for other significant economic development projects,” state policy director Khara Boender said.
“It deprives local residents of the opportunity to compete for jobs and investment, while also causing the area to relinquish substantial long-term economic investment, high-wage jobs, and critical tax revenue to neighboring areas or other states.”
SGV Progressive Action worked with hyperlocal groups including No Data Center Monterey Park to rally support for the measure.
The group is now focused on stopping data center proposals in the City of Industry and fighting a move by City of Industry, Santa Fe Springs, Vernon and City of Commerce to welcome data centers and other industry with fast-tracked permitting and tax incentives.
City of Industry, in the San Gabriel Valley, and Vernon, south of downtown L.A., are primarily industrial areas, each with around 300 permanent residents. They are employment centers, and tens of thousands of workers commute in daily.
There has been little vocal opposition to data centers among the few residents of these cities. Wong said the protest is primarily coming from the surrounding neighborhoods.
“If a data center gets built in City of Industry, residents across the region would bear the brunt of pollution and increased utility costs,” Wong said, noting that it is surrounded by 16 other cities and unincorporated communities.
Data center proposals have been limited in California compared to Virginia, Texas, Georgia, Illinois and Arizona, which sit at the center of a recent boom in hyperscaler facilities to power artificial intelligence.
California has the third-most data centers in the country, with 300, but high electricity rates, expensive land and regulatory hurdles mean that fewer, and smaller, facilities are currently planned than in other hotspots.
That doesn’t mean opposition hasn’t been fierce. In Coachella and Imperial County, residents are showing up in droves to protest local proposals.
In the San Gabriel Valley, Montebello, El Monte and Baldwin Park have all enacted temporary moratoriums, and Alhambra recently banned data centers as part of a zoning code update.
Wong said she hoped the ballot measure vote would galvanize the opposition. “The vote is a testament to the people power of our region,” she said. “Our region is worth protecting, and we won’t let data centers determine our future.”
A rule intended to prevent rent gouging in the wake of the Eaton and Palisades fires has lapsed in Los Angeles County, possibly exposing some renters to hikes.
The executive order that blocked rent increases was issued by Gov. Gavin Newsom amid the devastating wildfires last year. Under the order, landlords couldn’t increase rents by more than 10% above their prefire levels.
The rule, which was supposed to be temporary and was repeatedly extended, ended Friday after a vote to extend it again failed to garner enough votes. Supervisor Lindsey Horvath, whose district includes Pacific Palisades, sounded the alarm in a motion to extend price protections that failed to pass at the Board of Supervisors’ May 19 meeting.
“These price gouging protections continue to be necessary as construction and rebuilding continue, and as thousands of people remain displaced,” the motion said. “Families which signed short-term leases could face drastic price increases of 50% or more without further price gouging protection.”
Los Angeles County is home to more than 1 million rental properties, though not all of them needed protection from the new rule. There are already stricter rent increase caps for many residences, depending on the location, type and age of the building. Despite the rent control in the region, the people of Los Angeles pay among the highest rents in the country.
It is uncertain whether renters will face rapidly rising rents now that the protection has lapsed. But some real estate experts and policymakers said there was no need for the temporary rule that was part of the governor’s state of emergency.
Supervisors Kathryn Barger, Janice Hahn and Holly Mitchell abstained from voting on the motion to extend the protection, while Supervisors Hilda Solis and Horvath supported it.
“I abstained because I did not see sufficient evidence to justify extending this emergency ordinance, nor did I see evidence to eliminate it entirely,” Hahn said.
Barger’s office said she supported allowing the protections to sunset while waiting to see whether new information emerged.
“Market data already shows countywide rents are only about 2% above pre-emergency levels and rental inventory has grown,” Barger representative Helen E. Chavez Garcia said. “The Supervisor is also mindful of the burden these ongoing protections place on small property owners throughout the county.”
Mitchell did not immediately respond to a request for comment.
There haven’t been steep rent hikes in neighborhoods within three miles of the Palisades fire, according to a Times analysis of data from Zillow, the property listing company.
In ZIP Codes within three miles of the Palisades fire, rent increased 4.8% from December 2024 to April 2025. In areas around the Eaton fire, which destroyed swaths of Altadena, rent jumped 5.2% in the same period.
In L.A. County, ZIP Codes farther from the fires saw only about a 2% increase.
A landlords representative, Jesus Rojas of the Apartment Owners Assn. of Greater Los Angeles, told the supervisors during public comment at the meeting that the county’s rent-gouging rules have “long outlived the emergency they were intended to address” and are now being “wrongfully used to harm thousands of rental housing providers throughout the county.”
“There is no proof that multifamily rental housing providers are hugely increasing rents for impacted homeowners,” Rojas said.
Indeed, there are strong signs that the property market in the Los Angeles area has at last begun to cool.
L.A. metro-area rent prices recently fell to a four-year low, with the median rent slipping to $2,167 in December.
Meanwhile, condominium sales had their slowest start of the year in decades. Condo sales in Los Angeles have plummeted to a 20-year low, with fewer than 2,000 units sold in January and February — the worst start to the year since 2005.
Newsom defended the price-gouging protections shortly after they went into effect.
“In the days following the Los Angeles firestorms, we worked quickly to protect Los Angeles survivors from any form of exploitation,” he said in February 2025. “The state has the tools in place to not only block price gouging during this emergency, but also to prosecute bad actors.”
The Los Angeles County Department of Consumer and Business Affairs said it received more than 2,000 complaints after the fires, alleging that retailers and landlords were taking advantage of people put in hardship by their losses, and sent out more than 2,000 cease-and-desist letters to businesses and landlords for alleged price gouging, said Morine Merritt, who oversees department investigations into consumer and real estate fraud.
“Close to 90% of the complaints that we received involved allegations of rent increases,” Merritt said in an interview. Now that the fire-related protections have expired, existing laws and “regular market conditions determine price increases for goods and services, including rents,” she said.
Crackdowns on fire-related rent gouging have been rare, said Chelsea Kirk of the activist organization the Rent Brigade, which analyzed L.A. County’s rental market in the year after the fires. It reported 18,360 potential examples of price gouging in listings but said that few lawsuits had been filed by authorities so far.
Last week, Rent Brigade announced what it said was the first private civil lawsuit brought by a family that claimed to be rent-gouged in the aftermath of the wildfires. Plaintiffs Randall and Candy Renick, whose Altadena home was damaged, said they were charged nearly three times the maximum permitted rate for nearly 10 months. They seek restitution of $96,000 plus civil penalties and attorneys’ fees.
The rental market has probably stabilized since the fires, Kirk said, but other families may still be “locked into illegal rents” that they agreed to pay when they were in a rush to find housing after they were displaced.
Dear Mr. Pelley:
I meant what I said in my letter last week to the 60 Minutes team: joining 60 Minutes is the honor of my career and I am grateful to be working alongside the people who have contributed to the most important television journalism brand this country has ever produced. While I’m new to 60 Minutes, I’ve devoted my career to investigative journalism and storytelling. I started this job excited to collaborate and to benefit from the wisdom and experience of the 60 Minutes veterans, with you among them. For that reason, one of the first things I did in my new role was call you to talk and invite you to dinner. It is a profound disappointment that you rejected that overture and chose ambush instead. Yesterday, you hijacked my first meeting with staff to disparage me, my qualifications, and my intentions with remarkable incivility and contempt. I welcome a diversity of viewpoints and respectful debate among the team, but this was nothing of the sort. Yesterday’s performative display of hostility enacted in front of the staff instead of in a civil, private conversation-demonstrated that you have no interest in contributing to the future success of the show, or approaching my new tenure with a mind open to collaboration and progress. I am here to deliver first-in-class news programming, not to make headlines about newsroom drama. I am eager to work alongside those who share this goal.
Despite yesterday’s misconduct, I had hoped that in sitting down with you today we could find a path forward together. You made clear that you are not interested in such a path.
Your antipathy to the future of the show has come through loud and clear. And I have heard you. I therefore write on behalf of CBS News, Inc. (“CBS”) to inform you that your employment with CBS is terminated for cause effective immediately. Enclosed is your formal termination letter.
Sincerely,
Nick Bilton
Executive Producer, 60 Minutes
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