Remarks as Prepared for Delivery by Assistant Director in Charge George Venizelos at Press Conference Concerning Charges Filed Against JPMorgan
|FBI New York January 07, 2014|
The following remarks were prepared for delivery by FBI New York Assistant Director in Charge George Venizelos at a press conference concerning the charges filed against JPMorgan Chase Bank N.A. in connection with their conduct during Bernard L. Madoff's multi-billion-dollar scheme.
The FBI, and law enforcement generally, is only as good as the information we have. We can’t be in all places or know all things. We rely on the public to alert the police about a bag left on the subway or about a man brandishing a weapon.
I wish the same could be said about Wall Street.
As early as the mid 1990s, questions began to arise about Madoff’s business at JPMorgan. Similar questions at a rival institution resulted in the closure of Madoff’s accounts for fear of fraud and for transactions “for which there was no apparent business purpose.” That institution even alerted JPMorgan of their concerns. Instead of taking similar action, JPMorgan kept on with business as usual and benefited from the even larger deposits they now held.
By 2006 Madoff’s business was again being questioned by JPMorgan’s employees.
There was the “odd choice” of a small, unknown accounting firm or the “relying on Madoff’s integrity” with little to verify its truthfulness.
The next year, in an e-mail between JPMorgan executives, one wrote that there was a “well-known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme.”
But it took until after Madoff’s arrest, after one of the worst crooks this office has ever seen, for JPMorgan to alert authorities to what the world already knew. Unfortunately, it was far too late.
JPMorgan failed to carry out its legal obligations while Bernard Madoff built his massive house of cards. Today, JPMorgan finds itself criminally charged as a consequence. The result is a deferred prosecution agreement and a record $1.7 billion penalty.
Time and time again, FBI agents are told when they make arrests: we knew about that crime for a long time. It’s happened with insider trading, and it happened with Madoff.
In order to avoid these types of disasters in the future—we all need to be invested in making our markets safer and more equitable. Traders, compliance officers, analysts, bankers, and executives are the gatekeepers of the financial industry. We need your help protecting our markets. Often, people in the financial business know about who’s cheating. We need to know it, too.
I’d much rather be here telling you about a bank, hedge fund, or investor who did the right thing. I’d much rather be here telling you about someone who picked up the phone and called the FBI. I’d much rather be telling you a story about prevention instead of heartache for thousands of investors who’ve lost their life’s savings.
Let’s work on preventing the next crime instead of preparing to talk about it.
I want to thank United States Attorney Preet Bharara, who has been an invaluable partner in bringing these cases; Deputy United States Attorney Richard Zabel; and Assistant U.S. Attorneys Arlo Devlin-Brown and Matthew Schwartz.
This investigation wouldn’t have been possible without the tireless work of FBI Special Agents Paul Takla and Jared Thompson and their supervisor Kathy Diskin.
- Press release: Manhattan U.S. Attorney and FBI Assistant Director in Charge Announce Filing of Criminal Charges Against and Deferred Prosecution Agreement with JPMorgan Chase Bank N.A. in Connection with Bernard L. Madoff’s Multi-Billion-Dollar Ponzi Scheme
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