A group of former Toronto-Dominion Bank employees has filed a lawsuit against the Canadian banking giant, alleging they were wrongfully terminated as part of the bank's response to widespread money laundering activities through its branches. The legal action highlights concerns about racial discrimination in the banking sector's compliance practices.
Allegations of Racial Discrimination in Firings
Five Chinese and Chinese-American former employees have taken Toronto-Dominion Bank to court, claiming they were improperly dismissed from branches in New York City. According to the complaint filed in Manhattan federal court, these terminations were part of the bank's aggressive crackdown on money laundering activities that had plagued its operations.
The plaintiffs revealed that at least 22 people were fired from four Chinatown branches across Manhattan, Brooklyn, and Queens boroughs. They argue that they were originally hired specifically to build relationships with Toronto-Dominion customers of Chinese ancestry, only to later face illegal firing and debanking based on their ethnicity.
The former employees were punished for crimes committed by other Chinese individuals — crimes they were not involved in by individuals they did not know, stated the legal complaint submitted on Wednesday.
Background: TD Bank's Money Laundering Scandal
The lawsuit comes against the backdrop of Toronto-Dominion's significant legal troubles related to money laundering. In October last year, the bank pleaded guilty to conspiracy to commit money laundering and reached a massive $3.1 billion settlement with US authorities.
This settlement marked the conclusion of years-long investigations into the bank's failure to prevent multiple criminal networks from using its branches to launder money connected to drug trafficking and other illegal activities. Court documents revealed that one network operating from a clothing warehouse in Queens alone laundered $474 million through Toronto-Dominion branches.
Records show that Da Ying Sze, the ringleader who later pleaded guilty, paid bribes to Toronto-Dominion tellers across New York, New Jersey, and Pennsylvania to facilitate the operation. The scheme involved depositing large amounts of cash and quickly converting them into bank checks.
Wider Implications and Bank's Response
The scandal has had profound consequences for Toronto-Dominion's leadership structure. Long-serving CEO Bharat Masrani stepped down earlier than planned, and six directors, including the chairman, departed from the board this year.
The bank, which serves 10 million US retail clients through approximately 1,100 branches primarily along the East Coast, now faces restrictions on its US retail banking assets as part of the settlement terms.
Toronto-Dominion has invested heavily in improving its anti-money-laundering controls, spending hundreds of millions of dollars and hiring dozens of experts to strengthen its compliance programs. However, the bank declined to comment on the current lawsuit, citing pending litigation.
The five plaintiffs are seeking to represent a nationwide class of Chinese and Chinese-American Toronto-Dominion branch employees in the United States who have been investigated and fired for what they describe as unspecific violations of the company's code of conduct and ethics since 2022. They are pursuing unspecified damages in the case, identified as Wong v. TD Bank Group, 25-cv-09634, in the US District Court, Southern District of New York.
