Just a few short months ago, JP Morgan (JPM) was forced to pay $2.6 billion to settle lawsuits over its dealings with Bernie Madoff.
For years, the bank looked past Madoff’s Ponzi scheme to collect its own lucrative share of the profits.
Well, that wasn’t the only instance of such malfeasance…
A federal court complaint filed last week in Missouri accuses JP Morgan of facilitating another Ponzi scheme. This one was orchestrated by William Wise, a Canadian who raked in as much as $200 million from 2004 to 2009.
In fairness to JPMorgan, Wise began the scheme at Washington Mutual, back when it functioned as an independent bank. Still, JP Morgan took the firm over in 2008, and almost immediately took note of Wise’s activity, as he shuttled millions of dollars to offshore accounts and friends and relatives.
The complaint brought to light an investigative report filed by JP Morgan on October 8, 2008. Furthermore, a compliance manager testified that he was aware of the suspicious activity by February 2009.
However, JP Morgan failed to act in a timely fashion.
Federal regulations require banks a to immediately contact law enforcement as soon as they become aware of potential laundering schemes. But once again, JP Morgan shirked its responsibility for the sake of business – just as it did with Madoff.
Perhaps part of the problem is that while Madoff got a 150-year prison term, no one from JP Morgan was never prosecuted or held accountable for breaking the law. To the contrary, JP Morgan CEO Jamie Dimon got 74% raise last year even though the bank has accrued $31.5 billion in fines and legal costs since 2009.
The Ponzi Don got a $20 million payday last year.
