JPMadoff: The Unholy Alliance between America’s Biggest Bank and America’s Biggest Crook

JPMadoff: The Unholy Alliance between America’s Biggest Bank and America’s Biggest Crook, by Helen Chaitman, lead attorney representing the victims of the $65 billion Bernie Madoff scam.

Bernie Madoff committed the biggest financial crime in history. He stole $64.8 billion from tens of thousands of innocent people from countries all over the world. But he did not do this alone. In fact, he could not have done this alone. He needed the assistance of a major financial institution and he needed a bank that would conceal his criminal activities.

We live in a society where a seventeen-year-old kid who robs a 7-Eleven of three hundred dollars goes to jail in a police van, while a thirty-four-year-old Wall Street banker who steals $1 billion from customers goes to Greenwich in his limousine.

A striking example of this state of injustice is the story of the illicit collaboration between Bernie Madoff and JPMorgan Chase.

JPMadoff, written by the lawyers who represent 1,600 of the customers robbed by Bernie Madoff, offers a thoroughly documented account of the illegal conduct of the officers of JPMorgan Chase who watched, for years, as Madoff committed financial crimes. … As the books lays out, JPMorgan Chase has become, like the Mafia, an institution that derives a substantial portion of its profits by violating the law.

There is a website and a book. From the foreword:

Few people realize the link between America’s biggest bank and America’s biggest crook. Our government, which knows about it and should be the most outraged, doesn’t care. … Our government did not require that a single JPMorgan Chase employee face criminal charges . . . or even lose his job. … How did we become a country where powerful employers can purchase immunity from criminal prosecution for their employees? …

There were 12 people who worked for Madoff who knew about Madoff’s embezzlement of money belonging to innocent investors. Outside of Madoff’s offices, nobody knew — for 20 years. Nobody, that is, except the people at JPMorgan Chase who were responsible to monitor the activities in Madoff’s account. They saw that, from 1986 to December 2008, Madoff deposited into his JPMorgan Chase account approximately $150 billion of funds — from upstate New York union pension funds, from charities, from corporate pension plans, from individual I.R.A. accounts ….

Bank officers knew that Madoff was an SEC-regulated broker who was retained by his customers to purchase securities for them. Yet, they saw no transactions in Madoff’s account indicating that he was purchasing securities for his customers. Instead, billions of dollars went to Madoff’s co-conspirators, or were wired overseas.

For a 20-year period, people at JPMorgan Chase saw that Madoff was acting illegally. At times, they called him in and questioned him. … According to Madoff, on one occasion a senior officer of JPMorgan Chase actually advised him how to structure the illegal transactions. …

The government recently settled its criminal claims against JPMorgan Chase. That settlement is an insult to the American people. If an 18-year-old kid holds up a 7/11 store and walks out with $3000, he goes to jail. But if JPMorgan Chase allows Madoff to steal $64.8 billion of innocent people’s money, nobody goes to jail. Instead, the bank simply coughs up a small portion of its ill-gotten profits and all the officers at JPMorgan Chase who helped Madoff are allowed to keep their jobs and to keep the obscene bonuses they earned for 20 years.

For the big banks, collecting fines is just a cost of doing their business. These fines are big compared to say the Australian Government’s deficit, but are small compared to bank profits.

Clearly, JPMorgan Chase is not the only financial institution that has abused the public trust and shattered public confidence in the entire banking system. But it is the biggest bank in the United States and probably the biggest offender, having paid approximately $29 billion [now $36 billion] in fines, penalties and settlements over the last four years alone to resolve claims that it acted dishonestly or illegally.

UPDATE: Criminal Bankers Threaten Entire World Economy-Helen Chaitman, by Greg Hunter.

Chaitman says all the big banks are basically criminal organizations, and “all of them regularly engage in fraud.” Chaitman also says, “I could have written this book about HSBC, Bank of America or Citi Group.  All the banks, and the government encourages them to do this, all of the banks have been operating like criminal enterprises. . . . The bankers have become such criminals it threatens the entire world economy.”

Chaitman contends, “Madoff had a group of people, a small group of people, who were grossly over compensated, who would just make up the statements after the fact.  They had no securities.  They had no stocks.  They just had pieces of paper saying they had stocks. . . . Madoff never bought the stocks.  He just kept all the money, and in fact, that’s why JP Morgan liked him as a customer. He kept on deposit billions of dollars, and JP Morgan Chase was free to use that money for its own purposes.”

Why no jail time for the management at JP Morgan Chase for a slam dunk criminal fraud? Chaitman says, “We have a President who doesn’t believe criminal bankers belong in jail, and he appointed an attorney general, Eric Holder, who had this nonsensical rationalization that the banks were too big to put in jail.  In other words, JP Morgan Chase, America’s biggest bank, who does business with 50% of American households, and 80% of fortune 500 companies, should keep all the criminal bankers because we would not be able to operate without them.”

Chaitman says the $36 billion in fines is just a fraction of the profit JP Morgan Chase is making by committing various frauds. Chaitman says, “If you look at their financial statements, they are generating huge profits.

Here is the author being interviewed: