By Pam Martens and Russ Martens: December 2, 2021 ~
We can tell you with some confidence what Jamie Dimon, the Chairman and CEO of JPMorgan Chase, is going to be doing at 11:00 a.m. this morning. He’s going to be listening to a teleconference in a federal court case titled Shaquala Williams v JPMorgan Chase & Co. That’s because the outcome of that case will determine if the bank Dimon has helmed through five separate felony counts – all of which received non-prosecution agreements from the Justice Department – will finally be prosecuted for a crime.
One might suspect that Kenneth Polite, the man President Biden nominated and the Senate confirmed to head the Criminal Division of the Justice Department in July, might also take an interest in this matter since the plaintiff is alleging that the Justice Department got played by JPMorgan Chase in its 2016 non-prosecution agreement. Unfortunately, Polite will have to recuse himself from this matter because JPMorgan Chase was his client at his former law firm, Morgan, Lewis & Bockius, according to the financial disclosure form he filed with the Office of Government Ethics. Polite signed an Ethics Agreement on April 23, 2021 that requires the following:
“Mr. Polite understands that as an appointee he will be required to sign the Ethics Pledge (Exec. Order No. 13989) and that he will be bound by it. Among other obligations, he will be required to recuse from particular matters involving specific parties involving his former employer or former clients for a period of two years after he is appointed, with the exception of Federal, state, and local government.”
Who did JPMorgan Chase hire to defend it in the Shaquala Williams case? It hired Morgan, Lewis & Bockius, which conveniently has a former law partner sitting at the helm of the Criminal Division of the Justice Department.
According to the docket, JPMorgan Chase will be represented by two attorneys from Morgan Lewis: Thomas Anton Linthorst and Tyler James Hill.
Williams is represented by Kathleen Riley, Jeremiach Iadevaia, and Brandon Robert White of Vladeck Raskin & Clark, a 70-year-old labor law firm in Manhattan – which is highly likely to have thoroughly vetted the allegations it has put before the court. The case number is: 1:21-cv-09326 in the Federal District Court for the Southern District of New York. The case was originally assigned to Judge Andrew Carter. But on November 16, without explanation in the docket, the case was reassigned to Judge Jed Rakoff, who curiously seems to land on a lot of JPMorgan Chase cases, ruling in favor of the bank in many high-profile matters. (See here and here.)
Wall Street On Parade previously raised the fact that there were serious red flags surrounding the vetting of Polite to head the Criminal Division of the Justice Department. Polite owed $1.5 million in debts according to his financial disclosure form and public mortgage records. He was paying over 18 percent interest on an outstanding balance on a credit card; 19.99 percent interest on a personal loan; and yet, he had decided to accept a job at the Justice Department where his income would be slashed by more than 70 percent. At Morgan, Lewis & Bochius, Polite had been a partner earning approximately $877,500 in 2020. He would likely want to return to that job after his stint in government with a paycheck of less than $200,000 annually. It’s this revolving door between government and Wall Street that is a key factor in the unprecedented levels of recidivist crimes we are witnessing on Wall Street today.
Shaquala Williams is not some random individual making unsupported charges. She is an attorney and former compliance official at JPMorgan Chase who is alleging eyewitness knowledge of extremely serious misconduct by the bank and retaliation and termination of her job for reporting the misconduct.
What should also be concerning to both Dimon and Polite is the extensive detail in the complaint filed by Williams. It is simply breathtaking in the array of charges she is leveling at the bank.
Part of Williams’ role at JPMorgan Chase was to make sure that the bank was in compliance with a non-prosecution agreement it had signed with the Justice Department in 2016. The Justice Department had charged in 2016 that JPMorgan’s Asia subsidiary had engaged in quid pro quo agreements with Chinese officials to obtain investment-banking business and had falsified internal documents to cover up the activities. The quid pro quo agreements boiled down to the bank putting the children of high Chinese government officials on its payroll in order to further its business interests in China.
The case became known as the “Princeling Scandal.” The Securities and Exchange Commission called it a “systemic bribery scheme.” When the $264 million settlement was announced, Kara Brockmeyer, then Chief of the SEC Enforcement Division’s Foreign Corrupt Practices Act unit, stated this: “The misconduct was so blatant that JPMorgan investment bankers created ‘Referral Hires vs Revenue’ spreadsheets to track the money flow from clients whose referrals were rewarded with jobs. The firm’s internal controls were so weak that not a single referral hire request was denied.” (Brockmeyer is now a law partner at Debevoise & Plimpton, representing corporate miscreants.)
Williams is alleging in her lawsuit that the bank’s internal controls remained so weak, despite the promises it made in its non-prosecution agreement with the Justice Department, that the bank continued to make highly suspicious “emergency” payments to third parties, one of whom was a former government official tied to Jamie Dimon.
The Williams case is also an embarrassment to the law firm, Paul, Weiss, Rifkind, Wharton & Garrison and law partner, Mark Mendelsohn, who negotiated the non-prosecution agreement on behalf of JPMorgan Chase and signed off on it. Mendelsohn currently chairs at Paul Weiss its Anti-Corruption and Foreign Corrupt Practices Act Group. Naturally, he also travelled through the revolving door, previously serving as the Deputy Chief of the Fraud Section of the Criminal Division of the Justice Department.
Paul Weiss is the law firm that is known for getting the serial lawbreaker, Citigroup, out of fraud charges. Paul Weiss recently came close to seeing one of its law partners, Alex Oh, sitting at the helm of SEC Enforcement. She lasted six days in the job because of various scandals.