A former TD Bank employee in Florida, Gerardo Aquino Vargas, faces allegations of accepting $200 bribes to facilitate the transfer of millions of dollars to Colombia, according to court documents filed in the U.S. District Court for the District of New Jersey. Gabrielle Salsbury covered the story for BankingDive.
DOJ Investigation Casts Light on TD Bank’s AML Practices
The criminal complaint comes amidst an ongoing Justice Department (DOJ) investigation into TD Bank’s anti-money laundering (AML) practices, which could lead to financial penalties of up to $2 billion.
Vargas, previously a retail banker in Hollywood, Florida, is accused of providing services to criminals to move money to Colombia. He allegedly supplied one co-conspirator with 28 debit cards, earning $5,600 in bribes, and reportedly charged lower rates for his illegal services, compared with other clients.
Vargas reportedly told the co-conspirator in Spanish, “Man, to me, this isn’t business. Honestly, I was thinking $200 per client with you guys. Obviously, I gave you 28 cards. That $200 I’m giving you guys. I’m not doing any more. With other people, it’s $500–$800 per account man. You guys know that you are my thing.”
When TD Bank froze some debit cards after identifying potentially fraudulent ATM transactions in Colombia, Vargas allegedly had two of them unblocked, according to court documents.
TD Bank Vows to Strengthen AML Programs After DOJ Investigation
While the complaint does not directly name TD Bank, it refers to “Financial Institution-A, one of the largest retail banks in the United States.”
TD spokesperson Lisa Hodgins stated that the bank cooperates with law enforcement to identify, stop, and support the prosecution of criminals. “When we became aware of these matters, we took action against these employees, coordinated efforts with the DOJ, and have supported their work to bring these criminals to justice,” Hodgins said. “More broadly, where our program was ineffective, we have held those leaders accountable and are taking action to drive the changes and meet our obligations.”
The ongoing DOJ investigation into TD Bank was triggered by a 2021 case in which federal prosecutors charged Da Ying Sze with laundering illegal fentanyl proceeds, totaling at least $653 million.
Continue reading how the CEO of TD Bank has vowed to fix AML compliance issues after the DOJ probe.
TD Bank Strengthening Internal Systems to Prevent Future Violations
This is not the first time the DOJ has probed TD Bank and its AML compliance issues. Banking+ recaps a class action lawsuit against TD Bank in which the DOJ is investigating for alleged AML violations related to the illicit fentanyl trade.
Considering this case, it is evident that robust internal controls, effective AML programs, and comprehensive third-party risk management are essential for preventing such violations. Strengthening talent and control mechanisms within the bank can further enhance its ability to manage compliance risks.
For in-depth coverage, head over to BankingDive‘s article: Florida TD employee accused of taking bribes in new AML case
