JPMorgan Chase to pay $1.7 billion for Bernie Madoff scandal

JPMorgan Chase

Newscast Media NEW YORK—Federal prosecutors and JPMorgan Chase have reached
a $1.7 billion settlement over the the bank’s role in the $65 billion Bernie Madoff
fraudulent Ponzi scheme. It is estimated that the actual amount of fraud may never
be known, due to the fact that many celebrities and politicians who were also
victims, are too embarrassed to come forward and admit they were duped.

The fine is the largest one ever imposed by federal regulators on an entity for
a violation of the Banking Secrecy Act. JPMorgan Chase was the lender in the Madoff
scheme, in which he defrauded investors out billions of dollars based on non-existent
investments and ghost trusts, into which his victims invested their money, that
Madoff spent on himself.

“We recognize we could have done a better job pulling together various pieces of
information and concerns about Madoff from different parts of the bank over time,”
wrote JPMorgan spokesman Joseph Evangelisti in an email to CNNMoney.

“We do not believe that any JPMorgan Chase employee knowingly assisted Madoff’s
Ponzi scheme,” he added.

The press release by prosecuting US Attorney Preet Bharara read as follows:

A press conference will be held today to announce criminal charges against
JPMorgan Chase Bank, N.A. for two felony violations of the Bank Secrecy Act in
connection with its relationship with Bernard L. Madoff Investment Securities, a
deferred prosecution agreement with the bank, and related civil actions. The
criminal charges against JPMorgan will be deferred for two years under an
agreement requiring JPMorgan, among other things, to admit to its conduct; pay
$1.7 billion to victims of Madoff’s fraud; and to reform its anti-money laundering
policies. The $1.7 billion payment by JPMorgan is the largest ever bank
forfeiture, and also the largest ever Department of Justice penalty for a Bank
Secrecy Act violation.

Currently, the 57-year-old Madoff, who really is the fall guy, is serving a 150 year
sentence for his crimes.