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TD Bank was already in hot water for its anti-money laundering failures. Now, a former employee of the bank’s AML department faces a felony charge in connection with a separate alleged criminal scheme.

Daria Sewell, 32, pleaded not guilty Thursday in New York state court to a felony charge of possessing personally identifiable information about customers.

Although the former TD employee was arrested in September, the case was not publicized until the Manhattan district attorney’s office issued a press release Thursday.

The charge against Sewell points to another challenge for TD on anti-money laundering issues. The U.S. unit of Toronto-based TD Bank Group recently pleaded guilty in federal court to money laundering conspiracy.

Sewell allegedly engaged in a different type of misconduct than was revealed by the federal investigation. The state case arose out of an investigation focusing on check fraud, authorities said Thursday.

Sewell, who worked at TD from 2023 to May 2024, used his position in the bank’s AML department to steal from TD customers.

After prosecutors executed a search warrant on her cell phone, they found images of 255 checks with customers’ names on them, according to the DA’s office. The cellphone also had personal information, including names, addresses and Social Security numbers, for nearly 70 other customers, prosecutors said.

Sewell allegedly shared customer information on a channel he operated on Telegram, an encrypted instant messaging platform, instructing others to open bank accounts to deposit the checks and then splitting the profits.

“Telegram can be a hotbed for criminal activity, and we’ve uncovered everything from fraud to the illegal sale of firearms to the financing of terrorism,” Manhattan District Attorney Alvin Bragg said in the news release.

Sewell faces one count of unlawful possession of personally identifiable information in the second degree. She is currently out on her own recognizance and is scheduled to appear in court on Dec. 19, according to a spokesman for the Manhattan District Attorney’s office.

The case against Sewell stemmed from a larger investigation in which five other people were charged in a nearly $500,000 check fraud scheme, according to the Manhattan District Attorney’s Office. Those five defendants and others communicated with Sewell to discuss strategies to commit check fraud, the DA’s office said.

Authorities did not provide the names of the other five defendants, and a spokesman for the DA’s office did not say whether any or all of those individuals are current or former TD Bank employees.

The investigation into the check fraud scheme remains ongoing, according to local prosecutors, who thanked New York Police Department detectives for their work on the case.

Sewell’s attorney, Lawrence Fisher, did not respond to a request for comment Friday.

A TD Bank spokesman said Sewell’s employment has been terminated and the bank has cooperated fully with investigators. A bank spokesman would not comment on whether other TD employees were fired in connection with the Manhattan district attorney’s check fraud investigation.

Sewell’s not guilty plea came on the same day that TD Bank was convicted in New Jersey federal court on money laundering charges.

Last month, the US arm of the Canadian bank pleaded guilty to money laundering conspiracy after allowing hundreds of millions of dollars in tainted funds to flow through its channels.

The sentence imposed by U.S. District Judge Esther Salas on Thursday was in line with what federal prosecutors had recommended. The bank must pay a $1.4 billion fine, forfeit $452 million in assets involved in the crime, and retain an independent monitor for three years. He will also be on probation for five years.

The Justice Department has prosecuted two non-executive TD employees in connection with its money-laundering investigation, but no high-level executives have been charged. Attorney General Merrick Garland said in October that criminal investigations into individual employees at every level of the bank are ongoing.