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JP Morgan Pays $2 Billion to Avoid Prosecution for Its Involvement In Madoff Ponzi Scheme

George Washington's picture




 

Bernie Madoff has said all along that JP Morgan knew about – and knowingly profited from – his Ponzi schemes.

So JP Morgan has agreed to pay the government $2 billion to avoid investigation and prosecution.

While this may sound like a lot of money, it is spare sofa change for a big bank like JP Morgan.

It’s not just the Madoff scheme.

As shown below, the big banks – including JP Morgan – are  manipulating virtually every market – both in the financial sector and the real economy – and breaking virtually every law on the books.

Here are just some of the recent improprieties by big banks:

  • Engaging in mafia-style big-rigging fraud against local governments. See this, this and this
  • Shaving money off of virtually every pension transaction they handled over the course of decades, stealing collectively billions of dollars from pensions worldwide. Details here, here, here, here, here, here, here, here, here, here, here and here
  • Pledging the same mortgage multiple times to different buyers. See this, this, this, this and this. This would be like selling your car, and collecting money from 10 different buyers for the same car
  • Committing massive fraud in an $800 trillion dollar market which effects everything from mortgages, student loans, small business loans and city financing
  • Pushing investments which they knew were terrible, and then betting against the same investments to make money for themselves. See this, this, this, this and this
  • Engaging in unlawful “Wash Trades” to manipulate asset prices. See this, this and this
  • Bribing and bullying ratings agencies to inflate ratings on their risky investments

The executives of the big banks invariably pretend that the hanky-panky was only committed by a couple of low-level rogue employees. But studies show that most of the fraud is committed by management.

Indeed, one of the world’s top fraud experts – professor of law and economics, and former senior S&L regulator Bill Black – says that most financial fraud is “control fraud”, where the people who own the banks are the ones who implement systemic fraud. See this, this and this.

The failure to go after Wall Street executives for criminal fraud is the core cause of our sick economy.

And experts say that all of the government’s excuses for failure to prosecute the individuals at the big Wall Street banks who committed fraud are totally bogus.

The big picture is simple:

  • The big banks manipulate every market they touch
  • The government has given the banks huge subsidies … which they are using for speculation and other things which don’t help the economy. In other words, propping up the big banks by throwing money at them doesn’t help the economy
  • The big banks own the D.C. politicians … so Congress and the White House won’t do anything unless the people force change

Also:

RBS Pays $600 Million for Manpulating Interest Rates … But Big Banks Are Manipulating EVERY Market to the Tune of Trillions of Dollars

 

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Wed, 01/08/2014 - 07:34 | 4310861 overmedicatedun...
overmedicatedundersexed's picture

at this point what differance does it make?

Wed, 01/08/2014 - 05:41 | 4310813 pupdog1
pupdog1's picture

After shaking out the sofa cuishions, Jamie may have had to sell a few orphans to pay for this.

Wed, 01/08/2014 - 03:40 | 4310740 The Wedge
The Wedge's picture

I'm more interested in the institutional support Madof received as Catherine Austin Fitts ounce claimed. In other words, he couldn't have gotten away with his scam as long as he did without regulators knowing about it.

Wed, 01/08/2014 - 02:50 | 4310730 Walt D.
Walt D.'s picture

Nearly everybody thinks that the Fed is a government agency like the US Treasury. However, the Fed  is a private bank that exists for the benefit of member private banks (of which JP is one). And, your never going to believe this. it manipulates interest rates. (It also manipulates the dollar, the stock market, gold, bitcoin and just about everything else). The $2 billion that JP has agreed to pay is going to come back with interest. Since the banks and the US Government are part of what the Japanese would call a kieretsu, the fine is like a transfer from one kieretsu business to another.

Wed, 01/08/2014 - 01:02 | 4310601 The Wisp
The Wisp's picture

Yeah Along with the Settlement amount, they should state how much Profit the Bank Made doing it.. so we can see if we are breaking even..

Wed, 01/08/2014 - 00:21 | 4310511 tradewithdave
tradewithdave's picture

When you put it all in a long list like that you make it look like the banks are all bad.  But what about all the great things that banks do... like lending to small businesses and paying a fair rate of interest on savings and providing a secure place for deposits... like... say Cyprus?  What about all those good things?  Not to mention the ATM machines and they even have a credit card called the "Freedom" card.  If I remember correctly, you're free to withdraw up to $300 per day of your money during an unscheduled bank holiday up until the final bail-in.  Quit your griping and be thankful they built that tall building in your town.  It stands as a memorial to free market capitalism. 

Wed, 01/08/2014 - 01:48 | 4310661 kurt
kurt's picture

Almost perfect dual meaning. The believers in banks could accept this writing as can those that want to puke down their decapitated neck cavities.

We should have a contest on writing to demonstrate such wonderful "both sides of the fence" vacuum communication.

It reminds me of how proud I was as a little boy to make a poop.

Nice work!

Wed, 01/08/2014 - 00:58 | 4310595 willwork4food
willwork4food's picture

It's not a problem with free market capitalism. It IS a problem with the owners of  the 5%ers that controll 90% of the money in America along with their paid Congress/Senate/NSA henchmen that get 'get out of jail free' cards and shake their naked ass at the camera after they get "fined" a penny for every ten dollars they stole. The ones that were sworn in to protect us from that rift, and paid quite well-out of the citizen's pockets are the lowest of the lowest of the lows. I destest...no that's not too strong a word, I LOATH those in "office" that have turned their backs on the Constitution of the UNITED STATES OF AMERICA.

Wed, 01/08/2014 - 00:02 | 4310442 willwork4food
willwork4food's picture

FUCK DC. FUCK WALLSTREET.

Tue, 01/07/2014 - 23:37 | 4310363 zerohedgejjxxzz12
zerohedgejjxxzz12's picture

I think every gold investor should first by more gold and then screw the screwers(fraudulent institutions) by taking physical delivery! The gold problem would then be solved! So simple, why is it not being done on a large scale! This would certainly give the manipulators a spanking!

It seems too simple!

This is how you beat the corruption!

Tue, 01/07/2014 - 23:13 | 4310282 starman
starman's picture

If you ever wondered why the world hates Americans here is your answer.

Tue, 01/07/2014 - 22:51 | 4310217 fireant
fireant's picture

So, who's going to jail?  You get 40 years for $40 in Texas for robbery.......I wanna know who the hell is going to jail for $billions in robbery?

Tue, 01/07/2014 - 22:14 | 4310117 RaceToTheBottom
RaceToTheBottom's picture

It would be interesting to know any estimates of revenue that the criminal organizations made to compare to the 2 Billion $ bribe that they paid to get off scott free.

Tue, 01/07/2014 - 20:12 | 4309774 nasa
nasa's picture

You know when you have this, this, this, and this in the sentence you are dealing with some serious pieces of shit.  I would expect a ATM surcharge increase letter in the mail shortly if I banked with those fucks...

Tue, 01/07/2014 - 20:09 | 4309764 alien-IQ
alien-IQ's picture

another perfect illustration of the difference between the "legal" system and the "justice" system...and never shall the two meet.

Tue, 01/07/2014 - 19:33 | 4309666 logicalman
logicalman's picture

I would suggest to anyone accused of fraud from now on to do some simple math then ask the judge for equal treatment.

Profit from Madoff (gotta love that name) divided by fine = x

Amount for which you are being prosecuted divided by x = the fine you have to pay.

Oh, yes, and you get to walk!

Equality before the law, and all that.

Tue, 01/07/2014 - 20:02 | 4309737 El Hosel
El Hosel's picture

"Congress and the White House won’t do anything unless the people forcechange"...  

Most people can stop doing business with the TBTF, I suggest they do it now, first thing tomorrow. Nothing is going to change Congress or the Whitehouse....I enjoyed telling the little fuck at my local JPM branch I was done with their criminal operation a few years ago. 

Tue, 01/07/2014 - 19:23 | 4309637 NickVegas
NickVegas's picture

We have a nice peak into the life of the untouchables.

Tue, 01/07/2014 - 19:27 | 4309652 logicalman
logicalman's picture

If the day ever comes when these bastards become touchable, I don't think they will like the kind of 'touching' they get.

I suppose that's why the Fed is hiring so many goons.

Wed, 01/08/2014 - 04:34 | 4310789 doctor10
doctor10's picture

your're right-ultimately thats what "homeland security" is all about.

The clowns in NY and DC weren't interested in a bunch from out in flyover country  arriving on planes well-armed  looking for the bastards who %^&ked it all up.

Wed, 01/08/2014 - 01:09 | 4310612 willwork4food
willwork4food's picture

I would love to 'touch' one of them.

Tue, 01/07/2014 - 19:09 | 4309585 Palladin
Palladin's picture

You hear all the time that they can't be criminally prosecuted because it's so difficult to prove intent. Well WTF is this:

http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2012...

and this....

Even after CBS puts this on nationwide TeeVee, they still can't find intent. (??)

http://www.cbsnews.com/videos/the-next-housing-shock/

Tue, 01/07/2014 - 19:25 | 4309644 logicalman
logicalman's picture

100% proof of intent is impossible, as it is impossible to be in someone else's head a while back.

I think, though, that a pattern of behaviour can certainly drive up the percentage to close to 100.

In any other situation intent is never proven either, it is based on the preponderance of the evidence.

How could you decide between murder and manslaughter if you require 100% proof of intent?

But then that would require critical thinking skills from politicians and judges.

I'm not holding my breath.

Here's a thing about finding things.

If you are required to search for mice and you want the number to come in low, search in the local cat's shelter.

This is how government 'inquiries' work.

 

Tue, 01/07/2014 - 22:46 | 4310195 hidingfromhelis
hidingfromhelis's picture

The "Justice" Department views that 100% threshold quite differently depending on if you're a TBTF vs a commoner.  If you're lucky enough to be on one of the upper rungs of the ladder, then it doesn't matter if you're caught with a smoking gun, toner cartridge, hard drive, trade records, etc.  Every once in a while, slip 'em a pittance in the form of one of these negotiated settlements with no admittance of wrongdoing.  If you're a peon and someone doesn't like you, you're screwed even if there's no evidence whatsoever.  Capisce?

Tue, 01/07/2014 - 22:57 | 4310233 logicalman
logicalman's picture

I thought that was pretty much the point of what I wrote.

Wed, 01/08/2014 - 01:54 | 4310675 kurt
kurt's picture

testy much?

Tue, 01/07/2014 - 18:04 | 4309467 thefirstabomb
thefirstabomb's picture

The proesecute is using a deferred prosecution agreement which should be used more regularly against Wall Street.  There also needs to be some real jail time for jokers of wall street

Tue, 01/07/2014 - 17:43 | 4309407 MeelionDollerBogus
MeelionDollerBogus's picture

good thing we're all equal under the law & only a fine is paid for felony violations.
Oh wait...

Tue, 01/07/2014 - 17:43 | 4309405 carlnpa
carlnpa's picture

Madoff stole 65 billion.

The fines to JP Morgan should have exceeded 65 billion to make the victims whole again, and to self fund the Government prosecution agencies (DOJ, FBI etc).

Take the profit out of the theft by the banks.

These settlements just encourage the bastards.

Tue, 01/07/2014 - 18:04 | 4309468 Clockwork Orange
Clockwork Orange's picture

Exactly.

They are following their age-old business model:

1.  Steal hundreds of billions

2.  Pay a billion dollar fine

3.  Give a few million to charity and make a big f*ing deal about it

4.  Pay off the sociopaths in Washington

5.  Repeat.

Its a crime, its a joke, but it will stay that way until the sheep have a reason to pay attention.

Wed, 01/08/2014 - 01:47 | 4310659 mt paul
mt paul's picture

the sheep

are too broke

to "pay" attention 

Tue, 01/07/2014 - 21:20 | 4309962 Emergency Ward
Emergency Ward's picture

6.  Admit no wrongdoing.

Wed, 01/08/2014 - 00:00 | 4310434 willwork4food
willwork4food's picture

Wear a nice suit.

Tue, 01/07/2014 - 17:31 | 4309379 Conax
Conax's picture

"So JP Morgan has agreed to pay the government.."

It's too bad JPM makes billions screwing us over, gets caught, and the USG gets the fine money.  Since the USG and JPM are joined-at-the-hip, how is this justice, even in Bizarro World?

Tue, 01/07/2014 - 19:13 | 4309602 Big Corked Boots
Big Corked Boots's picture

It's not justice. It's a business partnership.

Tue, 01/07/2014 - 17:18 | 4309331 frankTHE COIN
frankTHE COIN's picture

Man.....What happened to us ?

Tue, 01/07/2014 - 17:11 | 4309302 TrustWho
TrustWho's picture

Between the Bank Mafia and  the Judicial Mafia, I vote for supporting the Italian Mafia. At least the Italian Mafia had class.

Tue, 01/07/2014 - 17:58 | 4309453 MeelionDollerBogus
MeelionDollerBogus's picture

and could claim honestly to be a family business.

Tue, 01/07/2014 - 17:01 | 4309268 El Vaquero
El Vaquero's picture

Have I told you that I hate bankers?  I just want everybody to be clear on that. 

 

When there is another massive meltdown, if it actually gets the sheep mad enough to go after bankers, my bet is that they go after the tellers in the branch banks, who more than likely don't even have a clue how banking actually works.  It's the muckety-mucks who need necktie parties, but I could see the tellers being the ones who take the brunt of angry mobs. 

Tue, 01/07/2014 - 17:09 | 4309293 CultiVader
CultiVader's picture

Yes, the low wage tellers are where the rubber meets the road quite often. Bless their ignorant souls. Hopefully some of the middle tier speculators will kill themselves. As for the DImons and Blankfeins, we may need to channel some of the early 20th century anarchists to bomb or shoot them.

Tue, 01/07/2014 - 16:59 | 4309261 ebworthen
ebworthen's picture

And the Wall Street Mafia puts yet another body into the trunk.

Tue, 01/07/2014 - 17:23 | 4309350 SamAdams1234
SamAdams1234's picture

Careful what you wish for the US government might wind up owning JP Morgan.

Tue, 01/07/2014 - 18:01 | 4309460 MeelionDollerBogus
MeelionDollerBogus's picture
wow, that would be horrible and incredibly different than JP Morgan owning the US government.
Tue, 01/07/2014 - 23:46 | 4310394 willwork4food
willwork4food's picture

Careful what you wish for the US government might wind up owning JP Morgan

actually it's the other way around. Which is why Jimmie is still free and should be hung at the nearest tree.

Tue, 01/07/2014 - 16:55 | 4309244 logicalman
logicalman's picture

You also need the right pair of cufflinks.

I just hope one day Jamie gets a pair requiring a key!

 

Tue, 01/07/2014 - 16:50 | 4309211 ZerOhead
ZerOhead's picture

"Don't do the crime if you can't pay the fine."

~ Jamie Dimon   CEO JPM

Tue, 01/07/2014 - 22:50 | 4310126 Radical Marijuana
Radical Marijuana's picture

GREAT LINE, ZerOhead!

These "fines" have obviously become nothing more than a trivial cost of doing business as usual for the big banks. These kinds of "fines" flatly contradict several Centuries of jurisprudence regarding punitive damages. By those "fines" becoming nothing more than a trivial cost of doing of business, the system of incentives has been set up to guarantee more runaway triumphant financial frauds in the future than ever before. Hence, I believe that the final paradoxes will play through that those who destroy the rule of law are feeding a monster that will eventually grow to become so monstrous that it will destroy them too.

We are watching a spiral of applying the methods of organized crime spinning up and up, until it spins out of control. Their original triumph was by privatizing the public money supply, whereby private banks succeeded in corrupting the government, so that the government agreed to give away the power to make "money" out of nothing, as debts, to private banks, while that government agreed to force everyone, including itself, to then operate inside of that system of the legalized counterfeiting of the public "money" supply by private banks.

That runaway triumphant financial fraud is now the foundation of our entire economic system. Therefore, each increment of those banks being able to get away with more frauds, (which they effectively do under the current system of fake "enforcement" by having to pay relatively trivial fines) AUTOMATICALLY DRIVES THE DESTRUCTION OF THE RULE OF LAW, AND THEREFORE, NECESSARILY DRIVES THE WHOLE SOCIETY TOWARDS PSYCHOTIC BREAKDOWNS.

Obviously, the biggest banks can EASILY pay the fines, for committing their crimes. Indeed, the most constant trend during the last 100 years in the USA has been the ability of the biggest banks and their buddies, in the corporations that have grown up around them, TO BE ABLE TO LEGALIZE MORE LIES, BACKED UP BY MORE LEGALIZED VIOLENCE. Therefore, not only does the rule of law no longer effectively apply against the biggest banks when they break the few laws that still restrict them, but also, their longer term strategies tend to play through, that they are succeeding in getting the laws changed, so that things that used to be criminal, become legal for them to do.

The original source of that was the way that the public money supply in the USA stopped being gold and silver, whose value was set by Congress, and instead, the public "money" supply became legalized counterfeiting of that "money" out of nothing, as debts, by private banks. That was the original source of the runaway social insanities that now almost totally dominate the USA, and pretty well the whole world. After private banks succeeded in applying the methods of organized crime, in order to corrupt governments to legalize private banks making the government enforced public "money" supply out of nothing, as debts, everything necessarily had to get worse, faster, at an exponential rate, which it has done, as demonstrated by the inherent debt slavery numbers becoming debt insanity numbers.

After that fascist plutocracy juggernaut has run away like it has for a hundred years in the USA (and for about three hundred since the Bank of England was created) those who benefit from that system have already been able to rob everything worth robbing. Indeed, what has actually happened is that the governmental powers to rob, and to kill to back up that robbery, have been effectively PRIVATIZED. Since almost everything that could be robbed already has already been robbed, there is no facile way to go back to what existed before that successful runaway corruption took over the powers of governments, and privatized the powers to rob, in the forms of frauds, such as legalized counterfeiting, backed up by the force of governments, to collect taxes, as well as generally under legal tender laws. A tiny fraction of 1% of the population already "own" almost everything that could currently be owned, through their systems of legalized lies, operating organized robberies.

Those are the reasons why I insist upon the deeper definition that MONEY IS MEASUREMENT BACKED BY MURDER. That is also why I insist upon the theory that there must necessarily be driven monetary revolutions, while no monetary reforms are now remotely possible, nor could such cosmetic reforms ever become adequate to cope with the real magnitudes of these problems. While there is no doubt that, for the foreseeable future, the biggest banks will continue to be able to commit the crimes, because they can pay the fines, they are simultaneously destroying the rule of law when they do more and more that. Therefore, they are driving their own paradoxical final failure from too much successful fraud.

However, in order to more deeply understand the social facts that governments are the biggest organized crime gangs, controlled by the best organized gangsters, the banksters, one should not continue to use false fundamental dichotomies, and fall back on impossible ideals when promoting theoretical resolutions to these runaway problems. There are no realistic ways to go backwards. Those who propose going backwards, towards any kinds of old-fashioned religions and/or ideologies, in order to provide "solutions" for these kinds of problems, are indulging nostalgic nonsense, which is based upon deliberately ignoring the true nature and scale of these runaway problems, that our society has gone psychotically insane, because it operates its combined money/murder systems through the maximum possible frauds, and deceits, which almost axiomatically include the deliberate denial of the realities that there MUST necessarily be some systems of combined money/murder, whereby there are debt controls backed by death controls. Since we actually operate the current systems through the maximum possible frauds and deceits about themselves, including their controlled opposition also operating within that frame of reference, the true nature of these problems is being deliberately denied and suppressed, which makes any truly better resolutions of those problems appear to necessarily be on the other side of some sort of crazy collapse into chaos, or psychotic breakdowns, of those entrenched systems.

I believe that there will eventually come a limit to the degree to which the biggest banks will be able to continue to pay the fines for committing their crimes, because the accumulating consequences from doing so will undermine and destroy the systems that they depend upon when doing so. The biggest banks are achieving success from corrupting the rule of law, (as demonstrated by the principles of punitive damages being made a mockery of by these kinds of payments of fines for crimes) ... BUT, that steadily destroys the rule of law itself! Moreover, and more importantly, their relative degree of success at thereby operating through evil deliberate ignorance towards general natural laws is inherent to the way that their current successes are based upon continuing to operate triumphantly fraudulent financial accounting methods. Therefore, it is not merely their destruction of the human "rule of law" which is growing greater, but also, their degree of being able to operate with evil deliberate ignorance towards more general natural laws is also growing greater.

Thus, the path we are on is towards the fragmentations of the rule of law, both of men, and of nature, after the runaway privatization of the powers to rob and defraud, backed up by force, eventually get so extreme that their madness becomes self-destructive.  (The ways that natural laws enabled force to back up frauds themselves fragment -- not the natural law themselves -- which are deeply related to fragmentation of ability of the human rule of law to continue to function.) The interesting questions then become what MIGHT survive through the crazy collapses into chaos, and what MIGHT emerge after the psychotic breakdowns of the currently established systems ??? I wonder whether more radical truths MIGHT emerge through that process, so that more people will understand how and why MONEY IS MEASUREMENT BACKED BY MURDER ... AND MUST NECESSARILY BE ??? And, IF so, how monetary revolutions may play through that kind of enlightenment about how political economy actually exists inside of the context of human ecology. Furthermore, MIGHT that awakening enable a less fraudulent financial accounting system to PERHAPS start operating a somewhat saner industrial ecology, within the real limits of natural ecology ???

What we are watching today is the exponential growth of the runaway triumphs of force backed frauds, manifesting through the biggest banks, and the corporations that have grown up around those banks. (That is the result of the real ways that the human rule of law is actually based upon the ways that natural laws enable systems of organized lies to operate organized robberies.) They have no significant enemies, other than their own madness, causing their own self-destruction. However, AFTER that plays through, the interesting theoretical questions arise regarding whatever MIGHT survive and emerge through those intensifying selection pressure processes ??? Paradoxically, the degree to which the biggest banks were able to subvert the rule of law was originally their greatest strength, but which then eventually becomes their greatest weakness.

Wed, 01/08/2014 - 17:44 | 4312987 ZerOhead
ZerOhead's picture

Thanks

I don't think 99% of us will like how this ends but I am 100% sure that the TBTF's will not only survive but prosper through the inevitable collapse with a 'little help' from their Feds.

If it were a saner world one might be tempted to speculate that the TBTF's would become the architects of their own demise... but it ain't. We are fucked.

BTW... Nice piece.

Tue, 01/07/2014 - 17:31 | 4309384 NotApplicable
NotApplicable's picture

Well, lucky for you GW, there's an election season coming up.

Don't worry, you'll get 'em this time!

Wed, 01/08/2014 - 00:47 | 4310573 Boris Alatovkrap
Boris Alatovkrap's picture

Is luck have access to depositor money and shareholder fund to pay off. In Russia we call this bribery, but "fine", "bribery", is all same. In older time, is called "indulgences" and is pay papacy for pardon.

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