DOJ criticized by Warren for Telegram Deal settlement
In an open letter to Attorney General Merrick Garland and Deputy Attorney General Lisa Monaco, Sen. Elizabeth Warren, D-MA, expressed her concerns about the Justice Department's (DOJ) settlement with TD Bank. The settlement, announced on October 10, 2024, requires the bank to pay $3.09 billion in penalties for money laundering safeguard violations.
Warren takes issue with the DOJ having the bank plead guilty to conspiracy to launder money, rather than a money laundering charge. She argues that this decision precludes the Office of the Comptroller of the Currency's (OCC) process to revoke the bank's charter.
The senator posed a series of questions to the DOJ, including probing the choices behind the specific charges and asking whether prosecutors consulted with the OCC or other banking regulators as they negotiated the agreement with TD.
TD's executive management, including its senior leadership team at the time, was under suspicion for fraud offenses contrary to banking laws. Three money-laundering networks were able to move hundreds of millions of dollars through TD's accounts due to inadequate monitoring of trillions of dollars in transactions for several years.
Criminals used the bank to move money connected to illicit drugs, including fentanyl. The DOJ's criminal investigations into individual employees "at every level" of the bank are active and ongoing.
Warren contends that the plea agreement enables TD to avoid facing a spectrum of penalties lawmakers have put in place for banks involved in criminal money laundering. She also asked for details on the compensation clawbacks regulators are requiring as part of the plea agreement, but did not receive an immediate response from DOJ spokespeople.
In a bid to address its Anti-Money Laundering (AML) shortcomings, TD is required to create a new U.S. office. The bank must ensure it has sufficient resources to address AML deficiencies and will be independently monitored and reviewed on its compliance.
The OCC capped assets for TD's U.S. retail operations at $434 billion. Warren urged Garland to change the approach of failing to hold corporate executives accountable for crimes, stating that the current settlement does not sufficiently discipline the bank's leadership.
Elizabeth Warren addressed Garland, urging him to reconsider the approach and hold corporate executives accountable for crimes that occur on their watch. She demanded explanations on the DOJ's decisions and requested answers by Nov. 15.
Garland, in announcing the settlement, vowed to hold corporate executives accountable for crimes that occur on their watch. However, Warren argues that the current settlement does not meet this promise.
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