By Pam Martens and Russ Martens: September 17, 2019 ~
Yesterday, three traders at JPMorgan Chase, the bank headed by Jamie Dimon, got smacked with the same kind of criminal felony charge that was used to indict members of the Gambino crime family in 2017. The charge is racketeering and falls under the Racketeer Influenced and Corrupt Organizations Act or RICO. According to the Justice Department, the traders engaged in a pattern of rigging the gold, silver and other precious metals markets from approximately May 2008 to August 2016.
One of the traders, Michael Nowak, was actually a Managing Director at the bank and the head of its Global Precious Metals Desk. The other two traders are Gregg Smith and Christopher Jordan.
RICO is typically used to indict mobsters – which makes its use against employees of the largest bank in America a very disquieting event. But even more disquieting is that two trial lawyers compared JPMorgan Chase to the Gambino crime family five long years ago and recommended in their 2016 book that the bank’s officers be prosecuted under the RICO statute.
The trial lawyers are Helen Davis Chaitman and Lance Gotthoffer and the book is JPMadoff: The Unholy Alliance Between America’s Biggest Bank and America’s Biggest Crook.
In chapter 5 of the book, Chaitman and Gotthoffer write as follows: (JPMC stands for JPMorgan Chase.)
“In Chapter 4, we compared JPMC to the Gambino crime family to demonstrate the many areas in which these two organizations had the same goals and strategies. In fact, the most significant difference between JPMC and the Gambino Crime Family is the way the government treats them. While Congress made it a national priority to eradicate organized crime, there is an appalling lack of appetite in Washington to decriminalize Wall Street. Congress and the executive branch of the government seem determined to protect Wall Street criminals, which simply assures their proliferation.”
Raise your hand if you think Wall Street’s campaign windfalls to political candidates might have something to do with Washington’s failure to rein in its serial criminal acts.
Chaitman and Gotthoffer write further in their book:
“If Jamie Dimon is running a criminal institution, he should be prosecuted for it. And law enforcement has the perfect tool for such a prosecution: the Racketeer Influenced and Corrupt Organizations ACT (RICO).
“Congress enacted RICO in 1970 in order to give law enforcement the statutory tools it needed to prosecute the people who committed crimes upon orders from mob leaders and the mob leaders themselves. RICO targets organizations called ‘racketeering enterprises’ that engage in a ‘pattern’ of criminal activity, as well as the individuals who derive profits from such enterprises. For example, under RICO, a mob leader who passed down an order for an underling to commit a serious crime could be held liable for being part of a racketeering enterprise. He would be subject to imprisonment for up to twenty years per racketeering count and to disgorgement of the profits he realized from the enterprise and any interest he acquired in any business gained through a pattern of ‘racketeering activity.’ ”
Chaitman and Gotthoffer then brilliantly lay out their case for prosecuting the officers of JPMorgan Chase for overseeing a long pattern of criminal activity.
A tiny sampling of that pattern goes like this:
In October 2012, JPMorgan Chase paid $1.2 billion to settle claims that it, along with other banks, conspired to set the price of credit and debit card interchange fees.
In September 2013, JPMorgan Chase agreed to pay $80 million in fines and $309 million in refunds to customers whom the Bank billed for credit monitoring services that the Bank never provided.
On November 15, 2013, JPMorgan Chase announced that it had agreed to pay $4.5 billion to settle claims that it defrauded investors in mortgage-backed securities in the time period between 2005—2008.
On December 13, 2013, JPMorgan Chase agreed to pay 79.9 million Euros to settle claims of the European Commission relating to illegal rigging of benchmark interest rates.
In July 2013, JPMorgan Chase paid $410 million to the Federal Energy Regulatory Commission to settle claims of bidding manipulation of California and Midwest electricity markets.
On November 19, 2013, JPMorgan Chase agreed to pay $13 billion to settle claims by the Department of Justice, the FDIC, the Federal Housing Finance Agency, the States of California, Delaware, Illinois, Massachusetts and New York, and to consumers, relating to fraudulent practices with respect to mortgage-backed securities.
Then came the unprecedented criminal felony counts. In 2014 the U.S. Department of Justice charged the bank with two felony counts for its role in the Bernie Madoff Ponzi scheme. The bank put in writing to U.K. regulators that it suspected Madoff was running a Ponzi scheme but failed to report it to U.S. regulators. The bank allowed tens of millions of dollars to be laundered through the Madoff business bank account it maintained for decades. The bank admitted to the wrongdoing but no individual was charged at the bank. The bank was given a three-year probation and handed a deferred prosecution agreement.
The very following year, the bank was charged with another felony for its role in rigging foreign currency trading. It also admitted to that felony charge and was given a deferred prosecution agreement. Its probation for the foreign currency charge doesn’t end until January of next year. Which should be a problem for JPMorgan Chase if the Justice Department cares about its reputation and the honest pursuit of justice.
If you’re a regular citizen on probation and you seriously break the law, you are highly likely to go back to jail. In the case of JPMorgan Chase, it has been a serial recidivist and yet its deferred prosecution agreements have not been rescinded by the U.S. Department of Justice. According to the latest indictments, the activity occurred up to August 2016, when the bank was already on probation for criminal felony charges.
Equally outrageous, the Bank’s lavishly paid Board of Directors has allowed Jamie Dimon to serve as Chairman and CEO throughout this crime wave at the bank. Indeed, the serial crime wave only began when Dimon took over. Dimon became Chairman of the Board on December 31, 2006. He has been CEO since December 31, 2005 – presiding over almost 14 years of an unprecedented three felony counts, market rigging charges, $36 billion in fines and the staggering loss of $6.2 billion of bank depositors’ money in the London Whale gambling in derivatives episode.
American institutions like the FBI and the Justice Department have lost the trust of millions of Americans for failure to bring this unprecedented era of corruption on Wall Street to a close and hold the masterminds accountable. Until that happens, our country heads closer and closer to a corrupt oligarchy.