Madoff Payoff
JP Morgan headquarters located in New York, New York. Courtesy of CNN
Five years after Bernie Madoff was sentenced to 150 years in prison, the victims of his notorious multi-billion dollar embezzlement have finally received justice.
Madoff, the mastermind behind one of the largest financial frauds in American history, stole $65 billion from more than 4,000 client accounts.
Associated with Madoff’s infamous scandal is JPMorgan Chase, his primary bank for over 20 years. During that time, JPMorgan had a special knowledge of Madoff’s scheme but failed to report him, knowing that a majority of his clients used the bank.
Courtesy of CNN
“We will never know how many victims could have been spared their losses if someone at JPMorgan had spoken up at the first sign of something suspicious,” Mrs. Gail Casey, Convent of the Sacred Heart Assistant Head of Upper School and Financial Literacy teacher, said. “But given that they apparently chose to look the other way, I do think it is only fair that they contribute towards repaying the victims.”
The United States Department of Justice charged JPMorgan with a $1.7 billion penalty for declining to advise the government of criminal activities, therefore violating the Bank Secrecy Act. The department plans to use the money to recompense the thousands of people victimized by the ploy.
“JPMorgan failed to carry out its legal obligations while Bernard Madoff built his massive house of cards,” George Venizelos, senior FBI official, said in an article on nytimes.com
The bank also agreed to pay an additional $350 million to the Office of the Comptroller of the Currency, according to cnn.com.
This scandal raises the issue of the lack of consequences for large institutions, especially banks, involved in criminal activity. Corporations may be able to pay large settlements with no further repercussions.
“I am concerned that the size of some of these institutions become so large that it does become difficult for us to prosecute them,” Eric Holder, Attorney General, said, according to CNN. “We are hit with indications that if you do prosecute, it will have a negative impact on the national economy, perhaps even the world economy.”
– Cheyann Greirson, Staff Writer
Sources:
http://www.cnn.com/2014/01/07/politics/jpmorgan-chase-regulators-prosecutors/index.html?iref=allsearch
http://dealbook.nytimes.com/2014/01/07/jpmorgan-settles-with-federal-authorities-in-madoff-case/?_php=true&_type=blogs&_r=1&
http://www.csmonitor.com/USA/Justice/2014/0107/JPMorgan-to-pay-up-for-role-in-Madoff-scheme.-How-much-to-the-victims
