By Pam Martens and Russ Martens: May 19, 2014
In the past six months, five current workers and two former workers of JPMorgan Chase have died under unusual circumstances. Adding to the tragedy, all seven were in their late 20s or 30s and three of the deaths involved alleged falls from buildings – a rare form of death even during the height of the financial crisis in 2008.
According to the New York City Department of Health, there were just 93 deaths resulting from leaps from buildings in Manhattan and boroughs during 2008 – a time when century old iconic Wall Street firms collapsed and terminated tens of thousands of workers. Those 93 deaths represented just .000011625 of the City’s population of 8 million. JPMorgan’s global workforce population is just 260,000.
No other major Wall Street bank comes close in terms of young worker deaths over the past six months. Of equal concern, since December, the early deaths related to JPMorgan have been coming at a rate of one or two a month – almost like clockwork.
The most recent was 27-year old Andrew Jarzyk, who went missing in the early hours of March 30, after leaving friends at a supper club in Hoboken, New Jersey to jog in preparation for an upcoming half-marathon. A month later, his body was recovered from the Hudson River in Hoboken. According to police, there were no signs of trauma to the body. Jarzyk was employed at PNC Financial at the time of his disappearance but had worked previously as a technology intern at JPMorgan.
L. Jay Lemons, the President of Jarzyk’s alma mater, Susquehanna University, wrote in a tribute to Jarzyk that “During his undergraduate years at Susquehanna, Andrew was inducted into three national honor societies: Alpha Lambda Delta for first-year student achievement; the Order of Omega for Greek leadership; and Omicron Delta Kappa, a national leadership honor society recognizing students who demonstrate superior scholarship, leadership and exemplary character. As someone blessed to have known Andrew personally, I can attest that he indeed demonstrated all of these qualities.”
Tomorrow, a Coroner’s inquest will be held in London to investigate the circumstances of the tragic death of Gabriel Magee, age 39, a U.S. citizen from New Mexico working at JPMorgan’s European headquarters at 25 Bank Street in Canary Wharf, London. Magee was a Technology Vice President involved in the “planning, development, and operation of systems for fixed income securities and interest rate derivatives.” Magee’s body was discovered at approximately 8:02 a.m. on the morning of January 28 on a 9th level rooftop at the 25 Bank Street building. Magee had been working late the prior evening but had emailed his girlfriend to say he’d be leaving shortly. When he did not arrive home, she reported his disappearance to police.
The series of strange deaths has brought unwelcome attention to the fact that mega banks like JPMorgan Chase are allowed to secretly collect life insurance proceeds on the lives of their employees, and former employees, without disclosing the amounts to the families, or the public, or their shareholders. (Other corporations are likewise engaged in this practice.) The payments are a closely guarded secret between the companies and the insurers who collect the lucrative premiums.
While New York City based banks, insurance companies and other corporations received an estimated $3.5 to $4 billion in death benefits on the lives of workers killed during 9/11, according to a June 2003 presentation made by Ron Colligan to the Society of Actuaries, specific details on amounts received on a company-by-company basis have not been made public.
The death benefits among all U.S. corporations may now exceed $1 trillion and are growing annually. The practice is called Bank-Owned Life Insurance (BOLI) where banks are involved and Corporate-Owned Life Insurance (COLI) for other corporations. As we reported last month, just four of Wall Street’s largest banks (JPMorgan, Bank of America, Wells Fargo and Citigroup) hold a total of $68.1 billion in Bank-Owned Life Insurance assets. According to Michael Myers, an expert on BOLI and COLI and a partner in the Houston, Texas law firm McClanahan Myers Espey, L.L.P., those assets could potentially mean that just these four banks are holding $681 billion in face amount of life insurance on their workers, or possibly even more.
The cash buildup in the policies (mostly universal or whole life) is recorded as tax free income to the company and the death benefit is also received tax free. While the banks are not required to publicly report the number of workers they insure, or the life insurance amount per individual, or breakout the income they derive annually from deaths (it’s typically lumped in with numerous other items as “other income”) they do report in public filings to regulators the cash value amount and the year over year growth in cash value. As of December 31, 2013, JPMorgan held $17.9 billion in BOLI assets and had reported a gain of $686 million in the cash buildup. (The $17.9 billion in BOLI assets could represent as much as $179 billion or more in life insurance in force on employees, past and present.)
Key man insurance is an easily justifiable life insurance product for a business. That’s where the company insures the lives of its key principals whose loss would have a very real financial and operational impact. But BOLI and COLI have become known as dead peasant insurance because many companies are taking out policies on employees in bulk, often including rank and file workers. And there is evidence that companies grouse when workers have the temerity not to die as projected.
In her groundbreaking book released in 2011, Retirement Heist: How Companies Plunder and Profit from the Nest Eggs of American Workers, Ellen E. Schultz, an award-winning reporter for the Wall Street Journal, revealed the following in her chapter on “How Dead Peasants Help Finance Executive Pay”:
“In a confidential memo in 1991, an insurance agent wrote to Mutual Benefit Life Insurance Co. that American Electric Power (20,441 employees covered), American Greetings (4,000), R.R. Donnelley (15,624), and Procter & Gamble (14,987) were ‘acutely aware’ that mortality was running at only 50 percent of projected rates.
“The Procter & Gamble plan covered only white-collar employees, which might explain its poor death rate (34 percent of projected mortality), the memo noted. But the disappointing death rate at card maker American Greetings was a puzzle, since the plan covered only blue-collar employees, who are expected to have higher mortality rates. (The white-collar employees were covered by a separate policy with Provident.)
“Diebold, the agent wrote, had been expecting $675,300 in death benefits since adopting the plan; so far, it was expecting only one ‘mortality dividend’ of $98,000. ‘Do you think that a mortality dividend of that size relative to their current shortfall will give them comfort?’ the memo said.
“A company the agent called NCC had a better death rate, he noted. People were dying at 78 percent expected mortality. ‘However, this includes three suicides within the first year which is highly unusual’— NCC had not had one suicide in twenty-five years until 1990. ‘Without these suicides, NCC would be running at 33% expected mortality. This fact highly concerns me.’ ”
It’s hard to say from the memo, which emerged during discovery in a lawsuit, if the insurance agent is worried about the potential that the suicides were foul play or if he’s worried that the expected mortality rate in the future will fall short without a continuance of the unusual suicides. (Typically, insurance companies will pay the full death benefit in the case of a suicide if the worker has been employed at least two years by the company.)
It’s customary in cases of unusual deaths for the police to immediately explore “who benefits,” who has motive. Multi-million dollar insurance policies held on workers by serially malfeasant banks apparently raise no alarm bells among the men in blue today. Without exception, each of these unusual JPMorgan related deaths were instantly called “non suspicious” by the police, including that of Gabriel Magee, whose inquest into the matter is just now being held some four months later.
America wasn’t always this cowed by too-big-to-jail banks. The U.S. Supreme Court defined the idea of “insurable interest” in Warnock v. Davis in 1881, writing that “in all cases there must be a reasonable ground, founded upon the relations of the parties to each other, either pecuniary or of blood or affinity, to expect some benefit or advantage from the continuance of the life of the assured. Otherwise the contract is a mere wager, by which the party taking the policy is directly interested in the early death of the assured. Such policies have a tendency to create a desire for the event. They are, therefore, independently of any statute on the subject, condemned, as being against public policy.”
Today, BOLI and COLI are closely held corporate secrets – even Congress can’t get answers. At a hearing on October 23, 2003 before the Senate Finance Committee, Senator Charles (Chuck) Grassley explained how the General Accounting Office attempted to conduct a survey into the matter but was thwarted by the failure of the parties to turn over information.
Schultz reports in her book that the American Council of Life Insurers, the National Association of Life Underwriters, the Life Insurance Marketing and Research Association, and A.B. Best Co. which rates insurance companies, all say they don’t know how much of this insurance exists in the marketplace. (Senator Grassley said back in 2003 that it represents one-fourth of the life insurance market; others put it currently at one-third.)
Wall Street On Parade decided to seek the details on the life insurance held by JPMorgan by filing a Freedom of Information Act (FOIA) request with its Federal bank regulator, the Office of the Comptroller of the Currency (OCC) and a Freedom of Information Law (FOIL) request with the New York State Department of Insurance, now bundled into the New York State Department of Financial Services.
The OCC told us that it had documents responsive to our request but it would not provide them to us because 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.” (See OCC Response to Wall Street On Parade’s Request for Banker Death Information)
More shocking, the New York State regulator said it “does not have any of the records” – nothing, zip. This is the same state that watched the U.S. taxpayer bail out AIG, an insurance company headquartered in New York City, to the tune of $182 billion because of reckless insurance practices involving credit default swaps. (See NYS Department of Financial Services/NYS Insurance Dept Response to Freedom of Information Law Request by Wall Street On Parade Seeking Information on Life Insurance Held by JPMorgan on Employees Lives.)
And there is a growing amount of anecdotal evidence that dodgy things are happening with the billions invested in mortality bets on bank workers. Reports are surfacing that the banks have opened “separate accounts” and are personally managing the assets instead of paying out the premiums to an insurance company to manage. Ina Drew, the head of JPMorgan’s Chief Investment Office, reported on March 15, 2013 to the Senate’s Permanent Subcommittee on Investigations that her office was managing $9 billion of the company’s corporate owned life insurance portfolio. The Chief Investment Office is the division that lost $6.2 billion trading exotic derivatives in London with depositor funds from the FDIC insured bank in the U.S.
Following are the names and circumstances of the five young men in their 30s employed by JPMorgan who experienced unusual deaths since December 2013 along with the two former employees in their late 20s.
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 in Pearland, 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 just recently ruled that the cause of death was ethanol toxicity/accident. 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.
Andrew Jarzyk, age 27, went missing in the early hours of March 30, 2014 after leaving friends at a supper club in Hoboken, New Jersey. His body was recovered from the Hudson River in Hoboken on April 28, 2014. According to police, there were no signs of trauma to the body. Jarzyk was employed at PNC Financial at the time of his disappearance. He had worked previously as a technology intern at JPMorgan.