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TD Bank and RBC’s Ties to Alleged Mobster Raise Questions About Compliance

The spotlight has recently been on two major Canadian banks, TD Bank and RBC, after it was revealed that they continued to do business with Angelo Figliomeni, a man with alleged connections to the ’Ndrangheta mafia. Despite his long history of criminal associations and a high-profile 2019 arrest in Canada for money laundering, both banks maintained mortgages for him and his properties in the Greater Toronto Area. This raises significant concerns about the adequacy of the banks’ compliance with anti-money laundering (AML) regulations and due diligence protocols.

Angelo Figliomeni, a notorious figure linked to organized crime, was arrested in 2019 as part of one of the largest mafia takedowns in Canadian history. Despite his widely known connections to the ’Ndrangheta, a mafia group originating from southern Italy, both TD Bank and RBC continued to have business relationships with him. Documents show that both banks maintained mortgages on four of Figliomeni’s properties even after his arrest, with the mortgages originally taken out in the 2010s.

While this is not inherently illegal, the banks’ continuing relationships with Figliomeni have raised significant questions. Given Figliomeni’s well-documented criminal past, including convictions in Italy for his mafia ties and involvement in illegal activities like money laundering and drug trafficking, it is surprising that neither TD Bank nor RBC severed their ties after his 2019 arrest. Instead, TD Bank reportedly continued to provide mortgage financing for two of Figliomeni’s homes in the Greater Toronto Area, while RBC held mortgages on the other two.

Both banks, in their official statements, have defended their ongoing business relationships with Figliomeni, but their actions are causing concern among financial regulators, especially in light of the findings from law enforcement. This situation raises the issue of whether TD and RBC have adequately followed the guidelines of Canada’s financial watchdog, FINTRAC, and maintained proper anti-money laundering due diligence.

Mobster Business Practices: The Role of TD Bank and RBC in Figliomeni’s Financing

In financial institutions, clients with ties to criminal activity—particularly organized crime—are typically considered high-risk customers. According to Gary Clement, a former superintendent with the Royal Canadian Mounted Police (RCMP) who specialized in investigating proceeds of crime, Figliomeni should have been flagged as a high-risk individual by both TD Bank and RBC. His background should have necessitated enhanced due diligence procedures. However, both banks failed to implement these measures, which is a glaring oversight in their compliance protocols.

The mortgages held by TD Bank and RBC were taken out in the years after Figliomeni’s name had already been associated with criminal investigations. Reports in Canadian media had linked him to a faction of the ’Ndrangheta operating in Canada, involved in illegal gambling, loan sharking, and money laundering. Despite these allegations and his past convictions, both banks continued their business dealings with him.

Further, during the investigation into Figliomeni’s activities, it was revealed that he had used cash-intensive transactions for real estate investments. Figliomeni’s dealings were flagged by law enforcement, yet the banks continued to process and approve his loans. This failure to act in response to clear warning signs could indicate a severe lapse in the banks’ due diligence systems.

Due Diligence Failures: TD Bank and RBC’s AML Oversight

Anti-money laundering regulations in Canada, specifically the regulations enforced by FINTRAC, require financial institutions to assess the risks posed by their customers and to monitor transactions for signs of illicit activity. Both TD Bank and RBC have faced penalties in recent years for their failings in AML compliance. TD Bank, for example, was fined CAN$9 million by FINTRAC for violating AML regulations, including failing to assess and document money laundering risks properly. RBC was also penalized with a CAN$7.5 million fine for similar AML lapses.

Despite these penalties, both banks continued to do business with Figliomeni, even after his arrest. This raises important questions about the effectiveness of their anti-money laundering practices. Banks are required to conduct comprehensive background checks and ensure that high-risk clients are thoroughly vetted. This includes assessing potential links to organized crime and ensuring that appropriate steps are taken to mitigate the risk of money laundering.

One of the key challenges identified by industry experts is the lack of transparency and traceability when it comes to managing high-risk accounts. Both TD and RBC’s failure to identify Figliomeni’s criminal affiliations and take action against his continued use of their services represents a significant breakdown in their AML compliance frameworks. This failure may have allowed illicit funds to flow through their systems, potentially furthering money laundering activities.

The Importance of Strengthening Compliance in Canada’s Financial Sector

The ongoing ties between TD Bank, RBC, and the alleged mobster Figliomeni underscore a larger issue within Canada’s financial sector: the need for stronger compliance with anti-money laundering regulations. Financial institutions must ensure that they are adhering to both the letter and the spirit of Canada’s AML laws. These laws are designed not only to prevent criminal activity but to protect the integrity of Canada’s financial system as a whole.

Both TD Bank and RBC have the opportunity to improve their compliance procedures by:

Enhancing Due Diligence: Banks must implement stricter client onboarding and monitoring practices to identify high-risk clients and transactions.
Investing in Technology: The use of AI and machine learning in transaction monitoring can help detect patterns of suspicious activity faster and more accurately.
Improving Employee Training: Banks should train employees to recognize signs of money laundering and other illicit activities, ensuring that all staff are equipped to handle high-risk clients appropriately.
Collaborating with Regulators: Regular collaboration with Canadian financial regulators can help ensure that banks remain up-to-date on AML requirements and best practices.

By addressing these gaps, TD Bank, RBC, and other Canadian financial institutions can better mitigate the risk of being complicit in criminal activities and protect their reputations within the industry.

Conclusion: The Need for Stronger AML Enforcement in Canada

TD Bank and RBC’s ongoing relationships with Angelo Figliomeni, despite his well-documented criminal background, expose significant weaknesses in the Canadian banking sector’s ability to effectively prevent money laundering. The banks’ failure to sever ties with a high-risk client like Figliomeni raises serious questions about their internal controls and due diligence practices.

As the financial sector continues to digitalize, financial institutions must invest in more robust systems to identify and address risks. This includes upgrading technology, improving employee training, and maintaining a proactive approach to regulatory compliance. By doing so, banks can ensure they are better prepared to comply with Canada’s anti-money laundering regulations, protect their clients and investors, and safeguard the integrity of the financial system.

Source: Organized Crime and Corruption Reporting Project