Sept 27 (Reuters) - TD Bank is close to a

possible guilty plea to criminal charges that its U.S. retail

bank failed to curb money laundering tied to Chinese crime

groups and illicit fentanyl sales, the Wall Street Journal

reported on Friday.

Canada's second-largest lender is in talks with U.S. federal

prosecutors and its U.S. retail arm is expected to enter a plea

in two weeks, the report said, citing unnamed people familiar

with the matter.

TD Bank and the U.S. Department of Justice did not

immediately respond to Reuters requests for comment. The bank

said in May it had undertaken a comprehensive overhaul of its

U.S. and global anti-money laundering program.

The bank said at the time it had invested over C$500 million

($400 million) in program remediation and platform enhancements

as it had been subject to regulatory probes over its

money-laundering compliance program in Canada and the United

States.

U.S. authorities have alleged that TD was reckless in

failing to build and maintain systems to prevent money

laundering, the Journal said.

The newspaper said the parent company has set aside more

than $3 billion to cover the costs of resolving U.S. government

investigations.

The DOJ launched an investigation into the bank after agents

uncovered an operation in New York and New Jersey that laundered

hundreds of millions of dollars in proceeds from illicit

narcotics through TD and other banks, the Journal reported in

May.

($1 = 1.3512 Canadian dollars)