Despite U.S. historic fines on TD Bank, evidence shows the bank continues to be involved in money laundering with an alleged mafia leader
With Toronto-Dominion Bank already reeling from historic fines in the U.S. for conspiracy to commit money laundering, evidence has emerged that the bank continues to do business in Canada with alleged mafia leader Angelo Figliomeni.
Property records show that Toronto-Dominion (TD) Bank continues to provide financing for Figliomeni on two homes in the Greater Toronto Area. The Royal Bank of Canada (RBC) also holds two mortgages for Figliomeni.
All four mortgages were originally signed in the 2010s, years after Figliomeni had appeared in Canadian media reports as a fugitive from justice in his native Italy. Both banks maintained the loans even after Figliomeni’s highly publicized 2019 arrest in Canada in what York Regional Police called “the biggest mafia takedown” in their history.
Figliomeni and other alleged members of his group were charged with numerous crimes for the benefit of a criminal organization, including money laundering. The charges were later stayed and the case did not go to trial.
Figliomeni did not respond to requests for comment sent via his lawyers.
TD declined to answer specific questions about its relationship with Figliomeni. “On an ongoing basis, we complete account and product reviews, and address any situation where we can no longer support a client’s accounts,” said Allyson Theriault, a spokesperson.
TD source says bank won’t renew mortgages
A TD employee with knowledge of the situation said the bank began to demarket Figliomeni — “cancel all products and services” — after he was charged, and that he had been notified that his mortgages would not be renewed. TD declined to comment on the terms of Figliomeni’s ongoing mortgages, including when they would expire.
RBC, which is Canada’s largest bank, declined to answer questions about its mortgages with Figliomeni, citing privacy concerns. Spokesperson Cheryl Brean said RBC “continuously evaluates business relationships on a case-by-case basis.”
Both TD and RBC have recently been fined by North American regulators for failing to properly monitor suspicious financial transactions that bore the signs of money laundering. In October, TD agreed to pay $3 billion (USD) to U.S. authorities, who say the bank’s lax practices “created an environment that allowed financial crime to flourish.”
Figliomeni should have been considered a “high-risk” customer, given his long history as a suspect in criminal cases, according to Gary Clement, a former superintendent of the Royal Canadian Mounted Police who specialized in investigating the proceeds of crime.
He said the banks’ continuing business with Figliomeni, while not illegal, raises questions about due diligence procedures.
“They took these mortgages out, which tells me right off the bat [the banks] never did enhanced due diligence,” said Clement, who now works on anti-money laundering controls in the banking industry.
“That should have been picked up right from day one,” he added. “These guys would have shown up on some alert.”
A history of allegations against Figliomeni
Canadian and Italian police alleged that Figliomeni led a faction of the ’Ndrangheta, a mafia from Italy’s southern Calabria region that has grown into a global organization involved in drug trafficking and other crimes. The Canadian faction allegedly profited from illegal gambling and loan sharking, but those accusations were never tried in court.
Figliomeni was convicted in his home country in the 1990s for possessing illegal weapons and membership in a crime group. He was also named in news reports prior to his 2019 arrest in Canada.
In 2006, the Toronto Star reported that Figliomeni was wanted in Italy for weapons and criminal conspiracy charges, as well as mafia membership. Italy’s justice ministry did not respond to a request for comment on whether those charges are still active.
Figliomeni was also named in Canadian media reports in 2010 in relation to Italian investigations. In 2015, he appeared again in coverage of an Italian case naming him as a suspected “Toronto-area mafia leader.” He was never tried in Canada on these allegations.
Earlier this year, OCCRP and the Toronto Star revealed that Figliomeni’s group had relationships with bankers at both TD and RBC. Court filings, exhibits, and an internal police report show two bankers were investigated by police for allegedly helping the group launder the proceeds of crime.
The property records show that Figliomeni continues to receive financing from TD and RBC for the four homes. Canadian mortgages are typically issued for five years at a time, but the property records do not state when Figliomeni’s mortgages were renewed.
Can banks break their mortgages with a client?
While the banks could be contractually obligated to maintain the mortgages for a period of time, Clement said he has been involved in deregistering bank clients within two months.
“If [the banks] were misled by the individuals when they onboarded them, then they would have grounds probably to break it,” he said.
“This is not something that can be done overnight, and I respect that. But… five years — that seems a little long,” Clement added, referring to TD’s demarketing process for Figliomeni, ongoing since 2019.
Both banks’ spokespeople declined to comment any further on their continued business with Figliomeni.
“There is no legal path to break the mortgages, other than forgiving the loans, which TD is not prepared to do,” said the TD employee who was not authorized to speak publicly on behalf of the bank.
The new findings about Figliomeni’s continued business with banks in Canada come after TD pleaded guilty in the U.S. last month for conspiracy to commit money laundering. The U.S. cases are not related to the previous investigation into Figliomeni by York Regional Police.
Already Canada’s second largest bank, TD had been pursuing an aggressive expansion south of the border, with more than 1,100 branches along the eastern seaboard of the U.S.
TD’s rapid growth came at the expense of anti-money-laundering systems, U.S. authorities found. The Department of Justice said TD had failed to monitor $18.3 trillion (USD) in customer activity between January 2014 and October 2023, allowing more than $670 million to be laundered through its accounts.
“By making its services convenient for criminals, TD Bank became one,” said Attorney General Merrick Garland in a statement.
After becoming the 10th largest U.S. bank, TD has had an asset cap imposed on it, limiting its two U.S. banking subsidiaries from exceeding their current value of $434 billion. That was in addition to financial penalties totalling $3 billion. The Department of Justice called it “the biggest penalty ever imposed under the Banking Secrecy Act.”
TD has faced problems at home too. In May, Canada’s financial regulator, FINTRAC, penalized TD for violations including “failure to assess and document money laundering” risks. It fined the bank $9 million (CDN).
FINTRAC spokesperson Mélanie Goulette Nadon explained that the agency’s ability to impose fines is limited by Canadian law, which establishes “penalty ranges for each violation.”
The fine against TD was the “the largest penalty that FINTRAC has ever levied,” she added.
In December 2023, FINTRAC also fined RBC almost CAN$7.5 million for failing to adhere to anti-money laundering regulations.
When it penalized TD in May, FINTRAC stated that the bank had failed to take adequate actions even when it “was served with production orders on clients or was aware of relevant negative media related to clients.”
It’s unclear what cases FINTRAC was referring to. Court documents show that TD was issued production orders — a legal directive to provide information to law enforcement — during the police investigation into Figliomeni.
Theriault, the TD spokesperson, said the bank had “actively cooperated” with authorities investigating Figliomeni and his associates.
Suspect got mortgages with TD and RBC
During York Regional Police’s investigation into Figliomeni, dubbed Project Sindacato, police seized more than $35 million worth of assets from Figliomeni’s group, and shut down around 500 accounts linked to the group at RBC, TD, CIBC, and the Bank of Montreal.
All those assets had to be returned when prosecutors decided not to pursue charges. The decision came after Figliomeni and his co-accused argued that investigators had unlawfully listened in on calls between suspects and their lawyers.
The court also “restrained” 27 homes linked to the group, meaning they could not be sold. The properties together were worth about $24 million. The restraint order was lifted once the charges were stayed.
Four of these houses are the ones that RBC and TD hold mortgages on, property records show.
Figliomeni received mortgages from RBC worth a total of $1.5 million for two houses purchased in 2010 and 2015 in Vaughan and Mississauga. The mortgages covered almost the entire cost of the houses, which totalled $1.7 million.
Figliomeni bought two more houses in 2016, also in Vaughan, for a total of $2.5 million. He received $1.5 million in loans from TD, the documents show.
Although the Sindacato case fell apart, Clement, the former police superintendent, said the evidence brought forward in the investigation should have been enough to make the banks think twice about continuing business with Figliomeni.
“My own view is, once sufficient grounds exist to establish organized crime affiliations, the bank should close the accounts.”
This article was first reported by The Star
