Canadian banks are facing serious accusations of helping criminal groups move money tied to the deadly drug trade, as U.S. officials link financial institutions north of the border to Chinese triads and Mexican cartels that have flooded American cities with fentanyl, meth and other synthetic drugs.

TD Bank, one of Canada’s biggest lenders, admitted in U.S. court to aiding money laundering operations that helped drug traffickers funnel hundreds of millions in illegal proceeds. The bank agreed to pay $3.1 billion in fines after investigators uncovered failures that spanned nearly a decade. In some cases, customers made daily deposits of $1 million in cash without triggering action from the bank.

Prosecutors said five bank employees were directly involved in helping criminal clients avoid detection, including issuing dozens of ATM cards and accepting bribes. The investigation revealed that TD ignored repeated warnings from internal staff and federal regulators as the network continued moving money across borders.

David Asher, a former senior State Department official involved in financial crime investigations under President Donald Trump, said Chinese criminal networks based in Canada are managing cartel funds through banks like TD. He warned that other Canadian banks with operations in Mexico could also be caught up in similar schemes.

Canada’s legal framework has also come under criticism. A rule established by the Supreme Court in 1991 requires law enforcement to hand over nearly all evidence to defense attorneys early in an investigation. Asher said this has repeatedly compromised joint efforts with U.S. agencies by tipping off suspects who then change tactics or disappear.

The U.S. government has now designated several Mexican cartels as foreign terrorist organizations. That opens the door for U.S. agencies to apply terrorism financing laws to banks or other entities involved in moving money for those groups. Asher said Canadian banks proven to handle these funds could face serious consequences.

President Donald Trump has linked Canada’s failure to prevent cross-border criminal operations to the new tariffs his administration will enforce starting April 2. The White House has cited national security concerns over the movement of drugs and laundered money through Canadian institutions.

Marijuana grown in Canada and smuggled into U.S. states like New York and Washington has also been tied to the same criminal networks, with some shipments reportedly containing fentanyl and proceeds routed through Canadian financial channels.