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TD Bank was already in trouble for its failures to combat money laundering. 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 related to possessing customers’ personally identifiable information.

Although the former TD employee was arrested in September, the case was not made public until the Manhattan District Attorney’s office issued a press release on Thursday.

The indictment against Sewell points to another challenge for TD regarding 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 the federal investigation has brought to light. The state case arose from an investigation focused on check fraud, authorities said Thursday.

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

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

Sewell allegedly distributed customer information on a channel operating on Telegram, an encrypted instant messaging platform, directing other people to open bank accounts to deposit the checks and then split the profits.

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

Sewell faces a single count of second-degree unlawful possession of personally identifiable information. He is currently out on personal recognizance and his next court appearance will be Dec. 19, according to a spokesperson for the Manhattan district attorney’s office.

The case against Sewell emerged from a broader investigation in which five other people were charged in a nearly $500,000 check fraud scheme, according to the Manhattan prosecutor’s office. Those five defendants, and others, contacted Sewell to discuss strategies for committing check fraud, the district attorney’s office said.

Authorities did not provide the names of the five other defendants, and a spokesperson for the district attorney’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 Friday to a request for comment.

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

Sewell’s declaration of innocence came on the same day that TD Bank was sentenced in federal court in New Jersey in connection with crimes related to money laundering.

Last month, the US subsidiary of the Canadian bank pleaded guilty to money laundering conspiracy after allowing hundreds of millions of dollars of dirty funds to pass through their 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 fine of $1.4 billion, confiscate $452 million in assets involved in the crime and hire an independent monitor for three years. He will also be on probation for five years.

The Justice Department has indicted two non-executive TD employees in connection with its money laundering investigation, but no high-level executives have faced charges. Attorney General Merrick Garland said in October that criminal investigations were underway into individual employees at all levels of the bank.