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JPMorgan settles Madoff fraud claims for $1.7 billion

By The Associated Press

This article was published January 7, 2014 at 9:11 a.m.

people-stand-in-the-lobby-of-jpmorgan-chase-headquarters-in-new-york-in-this-may-11-2012-file-photo

People stand in the lobby of JPMorgan Chase headquarters in New York in this May 11, 2012, file photo.

NEW YORK — JPMorgan Chase and Co., already beset by other costly legal woes, has agreed to pay $1.7 billion to settle criminal charges accusing the bank of ignoring obvious warning signs of Bernard Madoff's Ponzi scheme, federal authorities said Tuesday.

The government said the $1.7 billion represented the largest ever bank forfeiture and the largest Department of Justice penalty for a Bank Secrecy Act violation. The settlement includes a so-called deferred prosecution agreement that requires the bank to acknowledge failures in its protections against money laundering but also allows it to avoid criminal charges. No individual executives were accused of wrongdoing.

The deal was announced by the office of U.S. Attorney Preet Bharara, who scheduled an afternoon news conference to detail the agreement to resolve criminal charges: two felony violations of the Bank Secrecy Act in connection with the bank's relationship with Bernard L. Madoff Investment Securities, the private investment arm of Madoff's former business.

Under the agreement, the criminal charges will be deferred for two years as JPMorgan admits to its conduct, pays the $1.7 billion to victims of Madoff's fraud and reforms its anti-money laundering policies, prosecutors said in a release.

JPMorgan didn't immediately comment on the settlement.

Read tomorrow's Arkansas Democrat-Gazette for full details.

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