Ex-TD employee charged in money laundering case

A former TD employee from Florida is charged with conspiracy to commit money laundering, the U.S. Department of Justice said in a Release Wednesday.

Leonardo Ayala, 24, who worked at a TD branch in Doral, Florida from February to November 2023, issued dozens of debit cards linked to accounts opened by another TD employee in the names of shell companies, and received bribes for that work . DOJ alleged. The accounts were then allegedly used to launder millions of dollars in narcotics proceeds through ATM withdrawals in Colombia, the DOJ alleged.

“Ayala repeatedly and corruptly issued numerous debit cards for TD Bank accounts originally opened in New Jersey and had those debit cards mailed to a New Jersey address, despite knowing he was being directed to do so by individuals who did not have the identified account were holder,” prosecutors said in a criminal complaint filed Tuesday.

Ayala allegedly received $2,900 from a Venezuelan national through a money transfer app, court documents allege. If convicted, he faces 20 years in prison and a fine of up to $500,000.

“We identified the activity, reported it and worked closely with authorities in their investigation. We continue to actively support their efforts,” TD spokesperson Elizabeth Goldenshtein said in an email Wednesday Bloomberg.

TD agreed to pay in October more than $3 billion in fines after agencies dug deep into the bank’s anti-money laundering measures.

The DOJ discovered it was millions of dollars linked to the illegal drug fentanyl funneled through the bank in May, according to a Wall Street Journal report.

Ayala appeared in federal court in Miami on Tuesday. His future court appearances will be in New Jersey, the DOJ said. Ayala declined to comment to Bloomberg when reached by phone.

However, he is not the first former TD employee to appear in court in connection with TD’s AML woes.

Gerardo Aquino Vargasa former Hollywood, Florida-based retail banker for TD, allegedly provided a co-conspirator with at least 28 debit cards – netting Aquino Vargas $5,600 in bribes – and claimed he charged them a lower rate than he charged others for the same illegal services. This is evident from court documents from June.

“Man, this isn’t business to me. “To be honest, I was thinking of you guys at $200 per client,” Aquino Vargas told the co-conspirator in Spanish. court documents. ‘Obviously I gave you 28 cards. I won’t spend that $200 I gave you anymore. For other people it’s $500-$800 per account guy. You know you’re my thing.’

The DOJ investigation into TD’s AML deficiencies was sparked by a 2021 criminal case in which federal prosecutors accused Da Ying Sze of New York City of coordinating a scheme that laundered at least $653 million in proceeds from illegal fentanyl.

DOJ agents had tracked members of Sze’s group during their investigation. In one day, Sze’s team stopped at three TD branches, and prosecutors allege Sze and others provided gift cards and other bribes worth at least $57,000 to bank employees.

TD failed to monitor $18.3 trillion in customer activity, allowing three money laundering networks to transfer hundreds of millions of dollars through TD accounts, the DOJ said in October.

In addition to the fines, the scandal has had far-reaching consequences for TD. It reportedly played a role in the collapse from the bank proposed acquisition from First Horizon, based in Memphis, Tennessee. The termination of the deal hampered the Canadian bank’s growth strategy in the southeastern US

The episode may also have accelerated the turnover of top management at the top of the bank. Former CEO Bharat Masrani announced in September that he would do so will step down in April 2025making way for the bank’s then head of Canadian personal banking, Raymond Chun, to take on the top role.

The bank’s U.S. retail operations also fall under the $434 billion asset limit imposed by the Office of the Comptroller of the currency..