NY Daily Record Since 1908
NEW YORK — For more than 15 years, there were signs something was amiss with what federal prosecutors in Manhattan call the “703 account” at JPMorgan Chase & Co.
Money was being transferred back and forth for no reason. The account holder was recording double-digit returns on investments that were too good to be true. The bank itself was worried enough about possible fraud to withdraw its own investments from him.
The name on the account was Bernard Madoff and on Tuesday, JPMorgan paid a steep price for keeping quiet about its suspicions.
Federal authorities announced that the nation’s largest bank will add to its other costly financial woes by forfeiting a record $1.7 billion to settle criminal charges alleging it turned a blind eye to the Madoff fraud, plus pay an additional $543 million to settle civil claims by victims. It also will pay a $350 million civil penalty for what the Treasury Department called “critical and widespread deficiencies” in its programs to prevent money laundering and other suspicious activity.
The bank failed to carry out its legal obligations to guard against money laundering while Madoff “built his massive house of cards,” George Venizelos, head of the FBI’s New York office, said at a news conference.
