J.P. Morgan has signed a five-year contract with the U.S. treasury to audit the approximately 1.7 billion payments government agencies make each year to ensure that the payments are accurate and genuine, Wall Street on Parade (WSOP) reported.
J.P. Morgan, the largest U.S. bank by assets, was chosen through a competitive process, the treasury said.
Apparently, integrity was not among the selection criteria.
Since 2014, JPMorgan Chase has admitted to five separate federal felony charges. Two of the counts accused the bank of ignoring warning signs that Bernard Madoff, mastermind of one of the biggest Ponzi schemes in U.S. history, was kiting billions of dollars through his accounts over a period of years.
J.P. Morgan failed to report any signs of the suspicious activity.
After Madoff’s financial mirage evaporated in 2014 and J.P. Morgan was charged, George Venizelos, an assistant FBI director, said, “J.P. Morgan failed to carry out its legal obligations while Bernard Madoff built his massive house of cards.
“Today, J.P. Morgan finds itself criminally charged as a consequence. But it took until after the arrest of Madoff, one of the worst crooks this office has ever seen, for J.P. Morgan to alert authorities to what the world already knew.”
Despite billions of dollars in check-kiting occurring between Madoff and one of his largest clients, Norman F. Levy, the bank never filed the legally-required Suspicious Activity Reports (SARs).
So much for monitoring the integrity of transactions.
Compounding the offense, JPMorgan Chase bank loaned tens of millions of dollars to Norman Levy and his family, which they used to invest with Madoff.
Lawyers for the Madoff Victims Fund wrote in court papers that JPMorgan Chase (JPMC) “referred to these investments as ‘special deals.’ Indeed, these deals were special for all involved: (a) Levy enjoyed Madoff’s inflated return rates of up to 40% on the money he invested with Madoff; (b) Madoff enjoyed the benefits of large amounts of cash to perpetuate his fraud without being subject to JPMC’s due diligence processes; and (c) JPMC earned fees on the loan amounts and watched the ‘special deals’ from afar, escaping responsibility for any due diligence on Madoff’s operation.”
In 2021, JPMC was sued by Shaquala Williams, a former compliance officer with the bank, who charged that JPMC was making improper payments to political insiders and disguising the payments within the bank’s accounting system.
After an earlier investigation in which the bank was found to have put the children of influential Chinese on its payroll to win investment banking clients, the U.S. Justice Department required the bank to implement stronger payment controls.
The controls the bank put in place were a sham, Williams alleged. The bank retaliated by firing her in 2019, she claimed. JPMC settled with her just before her suit against the bank was scheduled to begin.
TRENDPOST: JPMorgan is among a handful of elite banks that have carte blanche trampled the rules with impunity.
In the past four months, JPMorgan has negotiated payments totaling $365 million for coddling child sex trafficker Jeffrey Epstein, never reporting suspicious activity as required while Epstein channeled more than $1 billion in questionable transactions through his accounts at the bank.
In 2020, the U.S. Justice Department charged the bank with criminally rigging markets in treasury securities, the same agency that just hired the bank to police banks’ propriety. The justice department’s investigation found “thousands of instances of unlawful trading in U.S. Treasury futures contracts and in U.S. Treasury notes and bonds…”
At the same time, the bank was charged with a crime related to rigging the precious metals market.
Also in 2020, the U.S. Securities and Exchange Commission fined the brokerage arm of JPMorgan Chase $125 million, the largest fine ever for violating SEC rules requiring brokerages to document communications and make such records available to regulators. In 2021, JPMorgan Chase admitted to five felony charges of market manipulation brought by the U.S. Justice Dept. and paid over $920 million in fines.
In August 2022, two former JPMorgan traders were convicted in Chicago on federal charges of commodities fraud, wire fraud, and attempted market manipulation for their role in rigging gold markets over a period of years.
JPMorgan paid $920 million in fines related to the traders’ crimes. Neither of the traders were sentenced to prison time.
“JPMorgan Chase paid $1.085 billion in legal expenses in the last six months and is still battling hundreds of charges and legal proceedings on three continents,” Wall Street on Parade reported on 20 October.
As we have often said and have noted, if a bank is too big to fail, its employees don’t go to jail:
● “CLASSIC CAPITALISM IS DEAD” (5 Feb 2015)
● “SEVEN YEARS OF RIGGING THE GAME” (31 Jul 2015)
● “GLOBAL CORRUPTION INDEX: HOW LOW CAN YOU GO?” (28 Jan 2020)
● “DON’T CALL THEM ‘CRIMINALS’ – THEY’RE ‘WHITE SHOE BOYS’!” (29 Sep 2020)
● “BANKSTER BANDITS: ‘SERIAL CRIME WAVE AT THE LARGEST U.S. BANK’” (21 Dec 2021)
● “ECONOMIC UPDATE – MARKET OVERVIEW” (19 Jul 2022)
● “TWO JPMORGAN EX-TRADERS CONVICTED OF FRAUD” (16 Aug 2022)
● “ECONOMIC UPDATE – MARKET OVERVIEW” (20 Dec 2022)
● “UPDATE: THE BIG BANKSTER BUST” (4 Apr 2023)
● “ECONOMIC UPDATE – MARKET OVERVIEW” (4 Apr 2023)