JPMorgan Chase, while having already paid around $18B to the victims of the Madoff scheme, agreed to pay an additional $1.7B in criminal penalties, federal authorities said on Jan. 7.
The Ponzi scheme orchestrated by Madoff, caused a total loss of about $17B to its victims. Madoff plead guilty in March 2009 and is currently serving a 150-year term in prison.
The Department of Justice U.S. Attorney’s Office for the Southern District of New York said that this payment by JPMC is the “largest ever bank forfeiture & largest ever DOJ penalty for a Bank Secrecy Act violation.” The Bank Secrecy Act requires that banks file reports whenever they come to know of or suspect violations of federal law, which JPMC did not do.
The bank is to be criminally charged on two accounts: one for failing to maintain an effective anti-money laundering program, and the other for failing to file a suspicious activity report.
In addition to the payment, the prosecution agreement requires JPMC to make an admission of its conduct and to reform its anti-money laundering policies. The criminal charges won’t take place immediately, however. They will be deferred for a period of two years.
The $1.7B is to be wire transferred to the United States within three days after the execution of the agreement, which is still awaiting court approval.
To date, roughly $9.5B of the stolen $17B has been recovered.
Associated Press contributed to this report.