Two recent guilty pleas by former TD Bank employees — Oscar Marcel Nunez-Flores and Wilfredo Aquino — are a timely reminder that insider-enabled money laundering can defeat control frameworks if banks do not actively design for, detect, and deter employee misconduct. These cases come on the heels of TD Bank’s October 2024 criminal guilty plea and multi-agency resolution — totaling roughly $3.09 billion — that highlighted systemic BSA/AML failures, including insider facilitation risks.  

TD Bank’s October 2024 Guilty Plea

On October 10, 2024, Attorney General Merrick Garland announced that TD Bank pleaded guilty to conspiracy to commit money laundering and agreed to pay more than $1.8 billion to resolve the DOJ investigation, with total penalties reaching approximately $3.09 billion when combined with resolutions from the Federal Reserve, OCC, and FinCEN. The government’s case traced multiple money laundering schemes flowing through the bank, including a prolific network led by Da Ying “David” Sze that laundered more than $470 million through TD Bank via bulk cash deposits and subsequent movement through checks and wires. The plea agreement underscored insider risks. Prosecutors alleged Sze bribed bank employees with over $57,000 in gift cards and identified employees who opened accounts and provided dozens of ATM cards to drug cartel co-conspirators used to move funds, including across borders.

The resolution marked the first time a bank had pleaded guilty to felony conspiracy to commit money laundering. In addition to the record-setting fines, the OCC implemented a $434 billion asset cap on TD Bank until it remediates its AML compliance to the government’s satisfaction. You can read more about the settlement on our October 16, 2024, blog post here. At the time, the DOJ emphasized that investigations into individual employees at every level were ongoing, indicating potential continued individual accountability in addition to corporate remediation.

Recent Individual Guilty Pleas: Nunez-Flores and Aquino

On January 21, Oscar Marcel Nunez-Flores, a New Jersey-based TD Bank employee, pleaded guilty to conspiring to launder monetary instruments and receipt of bribes by a bank employee, admitting he facilitated the expatriation of more than $26 million from the United States to Colombia through accounts he opened and managed. He opened dozens of accounts — including in shell company names, often without any purported customer present — and issued over 600 debit cards that were used to make more than 120,000 ATM withdrawals throughout Colombia. He shipped cards directly to a co-conspirator, registered shell companies in New Jersey, and was paid per account via cash or peer-to-peer payments. He faces statutory maximum penalties of up to 20 years for money laundering conspiracy and up to 30 years for receipt of bribes, with sentencing scheduled for May 27.

Separately, on January 7, former TD Bank assistant store manager Wilfredo Aquino pleaded guilty to a money laundering conspiracy tied to the Sze network, which moved hundreds of millions through TD Bank accounts, including facilitating $1.975 million in deposits over three days in February 2021 and issuing checks to enable rapid withdrawals. Prosecutors alleged Aquino helped open nominee accounts, processed bulk cash while concealing the true cash couriers, and ultimately issued official checks totaling more than $92 million in connection with the deposits. Aquino allegedly received nearly $11,500 in retail gift cards from the network and was captured on bank surveillance footage engaging in transactions tied to the scheme; he is scheduled to be sentenced on May 12. The Sze conspiracy itself has been linked to $653 million in laundering, with $474 million flowing through TD Bank — a key factual backdrop to TD Bank’s 2024 resolution.

Insider Threats Defeat Front-Line Defenses

The recent guilty pleas by TD Bank employees underscore a persistent and often underappreciated risk in financial institutions: the threat posed by complicit bad actors embedded on the front line. While banks rightly emphasize the “first line of defense” in the three-lines model, those efforts too often rely almost exclusively on training, policies, and red-flag identification. As these cases illustrate, a frontline employee who knowingly circumvents controls can neutralize even well-designed compliance frameworks and create outsized legal, regulatory, and reputational exposure. For instance, as in the case of Nunez-Flores, opening accounts in a branch without the purported customer present is a violation of bank policy.  Effective risk management, therefore, requires not just education but also robust monitoring, accountability, and skepticism about assumptions that frontline failures are merely inadvertent.

So, what can banks do to mitigate insider-enabled money laundering risks?

• Design “insider risk” into your AML program. Explicitly map insider threat scenarios (e.g., bribed branch staff, mass issuance of debit/ATM cards, “no-customer-present” account openings, nominee account pipelines, and others) and incorporate those scenarios into risk assessments, control testing, and monitoring logic.
• Tighten frontline KYC controls and presence requirements. Require documented, risk-based exceptions processes for opening accounts without the customer physically present, with enhanced approval and ex-post review for branches and employees with elevated risk signals.
• Instrument card issuance and usage analytics. Flag unusual concentrations of card issuance by specific employees, mass issuance to related entities, and high-velocity foreign ATM withdrawals. Also implement velocity, geo, and device fingerprinting alerts for card-based cash-outs.
• Monitor for shell company and nominee-account patterns. Use entity resolution to detect common incorporators, addresses, and agent overlaps; risk rate employee-touched entities that show synthetic or thin-file indicators.
• Enhance bulk cash and official check controls. Pair cash deposit thresholds with requirements to identify the true conductor and scrutinize rapid conversion to official checks and wires, which were areas exploited in the Sze/Aquino conduct.
• Embed culture and accountability. Combine targeted training for branch/relationship staff with deterrents (e.g., surveillance for gift card/gifts patterns, mandatory disclosures) and emphasize personal liability risk, as underscored by the Nunez-Flores and Aquino prosecutions.

The Bottom Line

The recent insider guilty pleas are not outliers — they reflect the precise weaknesses cited in TD Bank’s historic resolution. Banks should assume regulators will probe for similar failure modes and expect accountability for both corporate systems and individuals. Now is the time to operationalize insider-specific AML controls, close frontline gaps, modernize monitoring, and fund compliance proportionate to risk.