Our banks screw us over day-in and day-out and the Feds don't stop them.

After Proffiting $1 Billion From Madoff Scheme, JP Morgan Refuses to Cooperate With Investigation (Click on this heading to read more)

posted by Randa Morris December 29, 2013  

 

Official documents obtained by Newsweek show that the Justice Department denied a request for enforcement of a subpoena, presented by federal banking regulators. The subpoena was meant to force JP Morgan Chase to disclose information relating to Bernard Madoff’s massive Ponzi scheme.
Madoff, a former non-executive Chairman of the NASDAQ stock market, was responsible for the largest financial fraud in US history. Madoff took advantage of thousands of investors, in a scheme that may have cost as much as $65 billion in losses. He was convicted of 11 felony crimes in 2009, resulting in a prison sentence of 150 years.

Madoff was one of the JP Morgan Chase’s largest customers, with accounts totaling billions of dollars. The bank is estimated to have profited by at least $1 billion from the Madoff scheme. While the bank has denied any knowledge of the fraud, federal inspectors have continued to probe the bank, regarding the crime, and Madoff himself claims that many people working for the bank were aware of criminal scheme.

A memo obtained by Newsweek shows that federal banking inspectors requested support in obtaining internal memos from JP Morgan Chase. The memos involve 90 employee interviews which were conducted by the bank, in regards to the Madoff fraud. The bank has denied inspectors access to documents for several years, leading the Inspector General to petition the Justice Department, requesting that obstruction charges be brought against the bank.

The memos are an important part of JP Morgan Chase investigation. Inspectors clearly believe that they could provide evidence showing that JP Morgan Chase employees were aware of the Madoff fraud and failed to report it to authorities, because they were also profiting from the activity. The law requires bank employees to immediately report suspicious activity to federal authorities.

The Department of Justice declined to pursue obstruction charges against JP Morgan Chase for failing to provide the memos as late as September of this year. This has led to short-sighted speculation that the Obama administration is working to protect the bank. However, there are other possible reasons that the Justice Department declined the request.