Guest Post: Suspicious Deaths Of Bankers Are Now Classified As "Trade Secrets" By Federal Regulator

Tyler Durden's picture

Submitted by Pam Martens and Russ Martens of Wall Street On Parade,

It doesn’t get any more Orwellian than this: Wall Street mega banks crash the U.S. financial system in 2008. Hundreds of thousands of financial industry workers lose their jobs. Then, beginning late last year, a rash of suspicious deaths start to occur among current and former bank employees.  Next we learn that four of the Wall Street mega banks likely hold over $680 billion face amount of life insurance on their workers, payable to the banks, not the families. We ask their Federal regulator for the details of this life insurance under a Freedom of Information Act request and we’re told the information constitutes “trade secrets.”

According to the Centers for Disease Control and Prevention, the life expectancy of a 25 year old male with a Bachelor’s degree or higher as of 2006 was 81 years of age. But in the past five months, five highly educated JPMorgan male employees in their 30s and one former employee aged 28, have died under suspicious circumstances, including three of whom allegedly leaped off buildings – a statistical rarity even during the height of the financial crisis in 2008.

There is one other major obstacle to brushing away these deaths as random occurrences – they are not happening at JPMorgan’s closest peer bank – Citigroup. Both JPMorgan and Citigroup are global financial institutions with both commercial banking and investment banking operations. Their employee counts are similar – 260,000 employees for JPMorgan versus 251,000 for Citigroup.

Both JPMorgan and Citigroup also own massive amounts of bank-owned life insurance (BOLI), a controversial practice that pays the corporation when a current or former employee dies. (In the case of former employees, the banks conduct regular “death sweeps” of public records using former employees’ Social Security numbers to learn if a former employee has died and then submits a request for payment of the death benefit to the insurance company.)

Wall Street On Parade carefully researched public death announcements over the past 12 months which named the decedent as a current or former employee of Citigroup or its commercial banking unit, Citibank. We found no data suggesting Citigroup was experiencing the same rash of deaths of young men in their 30s as JPMorgan Chase. Nor did we discover any press reports of leaps from buildings among Citigroup’s workers.

Given the above set of facts, on March 21 of this year, we wrote to the regulator of national banks, the Office of the Comptroller of the Currency (OCC), seeking the following information under the Freedom of Information Act (See OCC Response to Wall Street On Parade’s Request for Banker Death Information):

The number of deaths from 2008 through March 21, 2014 on which JPMorgan Chase collected death benefits; the total face amount of BOLI life insurance in force at JPMorgan; the total number of former and current employees of JPMorgan Chase who are insured under these policies; any peer studies showing the same data comparing JPMorgan Chase with Bank of America, Wells Fargo and Citigroup.

The OCC responded politely by letter dated April 18, after first calling a few days earlier to inform us that we would be getting nothing under the sunshine law request. (On Wall Street, sunshine routinely means dark curtain.) The OCC letter advised that documents relevant to our request were being withheld on the basis that they are “privileged or contains trade secrets, or commercial or financial information, furnished in confidence, that relates to the business, personal, or financial affairs of any person,” or  relate to “a record contained in or related to an examination.”

The ironic reality is that the documents do not pertain to the personal financial affairs of individuals who have a privacy right. Individuals are not going to receive the proceeds of this life insurance for the most part. In many cases, they do not even know that multi-million dollar policies that pay upon their death have been taken out by their employer or former employer. Equally important, JPMorgan is a publicly traded company whose shareholders have a right under securities laws to understand the quality of its earnings – are those earnings coming from traditional banking and investment banking operations or is this ghoulish practice of profiting from the death of workers now a major contributor to profits on Wall Street?

As it turns out, one aspect of the information cavalierly denied to us by the OCC is publicly available to those willing to hunt for it. On March 24 of this year, we reported that JPMorgan Chase held $10.4 billion in BOLI assets at its insured depository bank as of December 31, 2013.

We reached out to BOLI expert, Michael D. Myers, to understand what JPMorgan’s $10.4 billion in BOLI assets at its commercial bank might represent in terms of face amount of life insurance on its workers. Myers said: “Without knowing the length of the investment or its rate of return, it is difficult to estimate the face amount of the insurance coverage.  However, a cash value of $10.4 billion could easily translate into more than $100 billion in actual insurance coverage and possibly two or three times that amount” said Myers, a partner in the Houston, Texas law firm McClanahan Myers Espey, L.L.P.

Myers’ and his firm have represented the families of deceased employees for almost two decades in cases involving corporate-owned life insurance against employers such as Wal-Mart Stores, Inc., Fina Oil and Chemical Co., and American Greetings Corp. (Families may be entitled to the proceeds of these policies if employee consent was required under State law and was never given and/or if the corporation cannot show it had an “insurable interest” in the employee — a tough test to meet if it’s a non key employee or if the employee has left the firm.)

As it turns out, the $10.4 billion significantly understates the amount of money JPMorgan has tied up in seeking to profit from workers’ deaths. Since Wall Street banks are structured as holding companies, we decided to see what type of financial information might be available at the Federal Financial Institutions Examination Council (FFIEC), a federal interagency that promotes uniform reporting standards among banking regulators.

The FFIEC’s web site provided access to the consolidated financial statements of the bank holding companies of not just JPMorgan Chase but all of the largest Wall Street banks. We conducted our own peer review study with the information that was available.

Four of Wall Street’s largest banks hold a total of $68.1 billion in BOLI assets. Using Michael Myers’ approximate 10 to 1 ratio, that would mean that over time, just these four banks could potentially collect upwards of $681 billion in tax free income from life insurance proceeds on their current and former workers. (Death benefits are received tax free as is the buildup in cash value in the policies.) The breakdown in BOLI assets is as follows as of December 31, 2013:

Bank of America    $22.7 billion

Wells Fargo             18.7 billion

JPMorgan Chase      17.9 billion

Citigroup                   8.8 billion

In addition to specifics on the BOLI assets, the consolidated financial statements also showed what each bank was reporting as “Earnings on/increase in value of cash surrender value of life insurance” as of December 31, 2013. Those amounts are as follows:

Bank of America   $625 million

Wells Fargo           566 million

JPMorgan Chase    686 million

Citigroup                     0

Given the size of these numbers, there is another aspect to BOLI that should raise alarm bells among both regulators and shareholders. The Wall Street banks are using a process called “separate accounts” for large amounts of their BOLI assets with reports of some funds never actually leaving the bank and/or being invested in hedge funds, suggesting lessons from the past have not been learned.

On May 20, 2008, Bloomberg News reported that Wachovia Corp. (now owned by Wells Fargo) and Fifth Third Bancorp reported major losses on failed gambles with BOLI assets. “Wachovia reported a $315 million first-quarter loss in its bank-owned life insurance program, known as BOLI, because of investments in hedge funds managed by Citigroup Inc. Fifth Third said in a lawsuit filed last month that it had losses of $323 million from Citigroup’s Falcon funds, which slumped more than 50 percent in the past year as the subprime market collapsed.” Citigroup’s Falcon Strategies hedge fund had lost as much as 75 percent of its value by May 2008.

Following are the names and circumstances of the five young men in their 30s employed by JPMorgan who experienced sudden deaths since December along with the one former employee.

Joseph M. Ambrosio, age 34, of Sayreville, New Jersey, passed away on December 7, 2013 at Raritan Bay Medical Center, Perth Amboy, New Jersey. He was employed as a Financial Analyst for J.P. Morgan Chase in Menlo Park. On March 18, 2014, Wall Street On Parade learned from an immediate member of the family that Joseph M. Ambrosio died suddenly from Acute Respiratory Syndrome.

Jason Alan Salais, 34 years old, died December 15, 2013 outside a Walgreens inPearland, Texas. A family member confirmed that the cause of death was a heart attack. According to the LinkedIn profile for Salais, he was engaged in Client Technology Service “L3 Operate Support” and previously “FXO Operate L2 Support” at JPMorgan. Prior to joining JPMorgan in 2008, Salais had worked as a Client Software Technician at SunGard and a UNIX Systems Analyst at Logix Communications.

Gabriel Magee, 39, died on the evening of January 27, 2014 or the morning of January 28, 2014. Magee was discovered at approximately 8:02 a.m. lying on a 9th level rooftop at the Canary Wharf European headquarters of JPMorgan Chase at 25 Bank Street, London. His specific area of specialty at JPMorgan was “Technical architecture oversight for planning, development, and operation of systems for fixed income securities and interest rate derivatives.” A coroner’s inquest to determine the cause of death is scheduled for May 20, 2014 in London.

Ryan Crane, age 37, died February 3, 2014, at his home in Stamford, Connecticut. The Chief Medical Examiner’s office is still in the process of determining a cause of death. Crane was an Executive Director involved in trading at JPMorgan’s New York office. Crane’s death on February 3 was not reported by any major media until February 13, ten days later, when Bloomberg News ran a brief story.

Dennis Li (Junjie), 33 years old, died February 18, 2014 as a result of a purported fall from the 30-story Chater House office building in Hong Kong where JPMorgan occupied the upper floors. Li is reported to have been an accounting major who worked in the finance department of the bank.

Kenneth Bellando, age 28, was found outside his East Side Manhattan apartment building on March 12, 2014.  The building from which Bellando allegedly jumped was only six stories – by no means ensuring that death would result. The young Bellando had previously worked for JPMorgan Chase as an analyst and was the brother of JPMorgan employee John Bellando, who was referenced in the Senate Permanent Subcommittee on Investigations’ report on how JPMorgan had hid losses and lied to regulators in the London Whale derivatives trading debacle that resulted in losses of at least $6.2 billion.

Related Articles:

Swiss Insurers and JPMorgan Have More than ‘Suicides’ in Common 

A Rash of Deaths and a Missing Reporter — With Ties to Wall Street Investigations   

Suspicious Death of JPMorgan Vice President, Gabriel Magee, Under Investigation in London    

JPMorgan Vice President’s Death in London Shines a Light on the Bank’s Close Ties to the CIA   

As Bank Deaths Continue to Shock, Documents Reveal JPMorgan Has Been Patenting Death Derivatives   

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NoDebt's picture

Great article.  I never could understand why FORMER employees were being "suicided" along with some current ones.  It never occurred to me that the bank would hold a policy even AFTER they terminated employment (for which the bank would still be paying a premium to keep the policy in force).

If somebody isn't getting a kick-back for "suiciding" these people for the bank to collect the death benefit, I'll eat my hat.

The Gooch's picture

"Suicide Provisions", bitchez.

wee-weed up's picture

 

 

Typical Gubbermint answer...

From the promised... "Most transparent Admin in American history..."

Yep... how predictable...

"Nothing to see here - move along!"

Soon to be parroted by all the lapdog MSM in full lock-step support!

Caviar Emptor's picture

Unless... They faked their deaths and split the profits and joined the others on a private island in the South Indian Ocean where Malaysain Airlines went.....just a thought

pods's picture

Now I can understand why when I told them they are going to work me to death they smiled.

pods

ndotken's picture

"Trade Secrets' is financial terminology for "Go Fuck Yourself" 

AlaricBalth's picture

According to the OCC's Interagency Statement on the Purchase and Risk Management of Life Insurance, federally charted banks are also allowed to purchases life insurance policies on borrowers.

From the Statement: "When purchasing insurance on a key person or a borrower, management should consider whether the institution’s need for the insurance might end before the insured person dies. An institution generally may not hold BOLI on a key person or a borrower once the key person leaves the institution or the borrower has either repaid the loan, or the loan has been charged off...Institutions can take two approaches in purchasing life insurance on borrowers. First, an institution can purchase life insurance on an individual borrower for the purpose of protecting the institution specifically against loss arising from that borrower’s death."

http://www.occ.gov/news-issuances/bulletins/2004/bulletin-2004-56a.pdf

It would be interesting to see the total amount of insurance these banks have placed on their clients, as well as the client death rate per bank. However, I am sure those numbers are a trade secret as well.

If you have an outstanding loan with any of the TBTF banks, always check your six.

Pladizow's picture

This life insurance story is bullshit, a mere distraction!

Skateboarder's picture

Plad, you're off on this one. ZH has been publishing some crap recently. This is a breath of fresh air in the vein of old Tyler research.

zhandax's picture

Agreed, sb; I don't think it is as much BS as it just scratches the surface.  Loosing money from a hedge fund in conjunction with BOLI sure smells like these are not policies purchased from a 3rd-party insurance company, but self-insurance.  Even more shenanigans are possible if that is the case.

mvsjcl's picture

Me? I'm just thinking of the securitization of all those policies, and how they slice and dice them into tranches, offer them as collerateral for the London rehypothecation game, millions into billions into trillions, backed by nothing but life and death, fucking sick and macabe bastards.

Clockwork Orange's picture

Don't forget Larry McCarthy - Dick Fuld's Managing Director of Distressed Debt,

'Somehow he doesn't even seem to be on the list.

 

http://www.ibtimes.co.uk/lawrence-mccarthy-lehman-bond-swaps-529708

The Gooch's picture

The Carlisle Family Reunion!

Pass the chips!

palmereldritch's picture

Where Ken Lay is doing his best Ricardo Montalban impersonation as the newly retired Ben Bernanke squeals....

Da plane!....Da plane!!.....

Diego Garcia is ......FEDtasy Island

One World Mafia's picture

That's the question.  Since the person who took out the policy is not the same person as the one named in the policy who supposely committed suicide, will the policy pay out?

waterhorse's picture

It will pay out if the beneficiary's last name is Dimon or Blankfein.

Newsboy's picture

"Trade Secrets" sounds so much better than "I'll take the 5th".

TheFourthStooge-ing's picture

Laugh now, but don't be surprised when Schemin' Lloyd B reveals that GS has patented this as a business method.

Doing God's work, indeed.

Oh regional Indian's picture

Man I tell you, it's hard to leave  me speechless, but this whole story did.

What will these guys not do for money. Coin and bits ....

wow....

ori

Skateboarder's picture

I replied some usual goofy shit to Groundhog Day's post "2 years ago i would have been disturbed by this, now it's like water off a ducks back." below, but I am as speechless as you. I must have been underestimating the cruelty of these fuckers, if there is anything as such left after seeing their manaical actions over the last six years. Not only drawing insurance from the lives of the workers, but creating layers of bets on top of that? Fuck man, that's not even related to homo sapiens, bipedal organisms, or anything like that. Just pure evil shit.

Do they drive cars in heaven and hell? We might need afterlife car insurance.

BlindMonkey's picture

There are a fair number of books published about large corporations and banks actions during ww2. Their actions then were equally disgusting. I am not sure if BOLI is new, but it is certainly not the first time they have traded on death.

max2205's picture

Here's a new one. ...HFInsurance.   Bots write policies 2 hours before.you or someone else offs you....

Dewey Cheatum Howe's picture

The old life insurance scam wonder who taught who this one the banks or the mob. Until they changed the laws anyone could take out a life insurance policy on anyone else. The mob used to take out policies on homeless people then kill them since the cops would never follow up on the deaths outside of procedural purposes and then collect on the policy.

Mesquite's picture

It's done on Veterans, too...

wee-weed up's picture

 

 

"Trade Secrets" sounds so much better than "I'll take the 5th".

--------------

Hey, "I'll take the 5th" may have worked for Lois The non-Lerner!

Especially with the wussy Repubs... They should nail her lyin' ass to the wall!

Infinite QE's picture

She's tribe. She's got global immunity.

Groundhog Day's picture

2 years ago i would have been disturbed by this, now it's like water off a ducks back.  no news really phases me anymore. I'm upset cuz i didn't figure out they were doing this first.

on another note, Big religious institutions do the same thing on their, priests, rabbi's, sant's, preachers etc.

Skateboarder's picture

"Why did you molest my son!?"

"Trade secrets yo."

Tulpa's picture

"If somebody isn't getting a kick-back for "suiciding" these people for the bank to collect the death benefit, I'll eat my hat."

 

What evidence would you consider sufficient to prove that negative?

intric8's picture

All shit trails these days lead to dead ends with executive privilege signs on them

Cast Iron Skillet's picture

The banks probably hold policies on ALL of the rest of us ... payable even in the case of war, famine, radiation poisoning, etc.

Buckaroo Banzai's picture

Not a policy, but a securable interest in the value you produce on the US tax farm. Why do you think you have a social security number?

Infinite QE's picture

Probably a new division of Blackwater, or whatever they are calling themselves these daze.......

SGKid's picture

Hmmm I wonder how many WTC bankers were insured during 9/11?

One And Only's picture

I buy life insurance on all my bitches before I push them off the roof.

Now I'm no expert but life insurance policies carry a clause that they don't pay out in the event of a suicide in the first two years of the policy being in force. How long were the employees working at said banks before being suicided?

fonzannoon's picture

even if they were working there more than 2 years...i am no attorney, but if your spouse threw themselves out a window at JPM because they were under intense pressure by JPM, don't they have a case that this was intentional or in the least JPM was possibly causing this to benefit from it? I mean how many "key man" policies does JPM need?

Groundhog Day's picture

Lets see if they have 260k employees then i would guess 260k "key man" policies.  Those tellers they pay 9-10 dollars an hour are worth more to them dead then alive, especially if they have moved on say BAC or Wells fargo, where those firms can also take out "key Man insurance......RE HYPOTHICATION of tellers BITCHEZ.

One dead banker pays out multiple times....its like rolling a hard 6 or 8 on the craps table.....9 to 1 payout

fonzannoon's picture

Thew best is the guy they threw off the roof twice. I bet they had an AD&D policy on that poor guy.

"what do you mean he was not dismembered.....well fuck man, keep throwing him off until something gets dismembered while i call in the accident."

The Gooch's picture

Advanced Dungeons and Dragons was the shit.

RIP, Gary Gygax.

Dr. Engali's picture

My friends and I were early adopters of D&D. We would stay up all night playing. Some of the more fundamental religious people were convinced we were worshipping demons. We got a kick out of that.

pods's picture

When my friend got a copy of The Dragon magazine with the critical hit charts things got awesome.

pods

One And Only's picture

Don't forget the banker who shot himself 8 times with a nail gun.

Next will be some banker who killed himself by jumping head first into an axe.

Matt's picture

"Lets see if they have 260k employees then i would guess 260k "key man" policies.  "

I would guess more like 1 million. Think of all the people who ever worked there, people retired in their 80s after a lifelong career, people who quit after a few weeks, everyone inbetween. 

I'm not sure it is so much about profit, as it is about avoiding taxes; I believe the deductibles are tax deductible, while the claims are tax free?

Sub-Zero's picture

I know this industry. One of my partners was instrumental in BOLI development back in the 80's.

BOLI funds the reitrement of the key execs (it isn't keyman insurance). The "highly compensated" face a retirement income shortfall even if they max out all the tax-deferred vehicles available. This mimics a tax deferred account (inside life insurance is tax free).

Yes, I know what you've been taught. However, this is life insurance like you never seen, and you can't buy it; only banks can.

The cost of the insurance is minimal. In fact, the surrender value at the end of the first year is more than the premium.

The BOLI cannot be tied directly to the execs retirement; by law it cannot match exactly.The bank enters a contract with the employee to pay out a retirement/death benefit. Then the bank takes out the insurance, but it isn't tied to the first contract.

It typically guarantees a payout to the employee, or his/her family for a certain number of years at a definite annual amount if the employee dies prematurely.

The bank, if the employee dies of natural causes, recoups their loss on the retirement package (plus a little extra) from the life insurance payout. While the employee is retired, the bank borrows the money out of the insurance at a net-zero APR, the balance of which remains inside the life insurance to go to the bank at the employees death (tax free death benefit, of course). Or the bank can pay the exec however they want and let the life insurance continue to grow.

Lots of tax benefits to it, which is why banks use it (see the figures above).

The main benefit is this: banks can use up to 25% of their tier one assets (think deposits) to fund these. This is why it grew so rapidly after the bailouts; more free money for their reitrements. The auditors don't give it a second glance as long as it stays no more than 25%.

The rule of thumb is no more than 10% of the employees can be top hats. Although, legally I believe the figure can be as high as 33%.

COLI works similarly, but for is any c-corp (only) and not banks.

Essentially, a BOLI or COLI is selling greed and discrimination. Unlike qualified plans, not every employee has to have one.

NoDebt's picture

..... and your local "My Cousin Vinny" lawyer can beat the highly paid army of JPM laywers to prove that assertion in a court of bought-and-paid-for judges and attorneys, I assume?

 

fonzannoon's picture

His name was Jerry Callo, and yes he can.

logicalman's picture

You are assuming that there's an honest judge somewhere out there.

Pee Wee's picture

Who needs honesty with monetized justuce incorporated.  Rehypothecated morals and integrity for sale.