JPMorgan Chase Quietly Settles Whistleblower Case Involving Charges of Keeping Two Sets of Books and Improper Payments to Tony Blair

By Pam Martens and Russ Martens: October 26, 2022 ~

Jamie Dimon, Chairman and CEO of JPMorgan Chase

Jamie Dimon, Chairman and CEO, JPMorgan Chase

It was a lawsuit that should have made front page headlines in every major newspaper in America and on the evening television news. Instead, as we predicted, it was quietly settled on Monday, just 10 business days before a trial was scheduled to begin. The dollar amount of the settlement was not disclosed. Yesterday, Wall Street’s paper of record, the Wall Street Journal, devoted a mere 299 words to the settlement and the details of the case.

The lawsuit was filed in the federal district court for the Southern District of New York – a court system where mega Wall Street banks have a long history of evading justice.

The plaintiff in the case is Shaquala Williams, an attorney and financial crimes compliance professional with more than a decade of experience at multiple global banks. The defendant is JPMorgan Chase – the largest bank in the U.S. which has been charged with five felony counts by the U.S. Department of Justice since 2014. Despite the bank’s unprecedented crime spree, federal regulators and the Board of Directors of JPMorgan Chase have allowed the same Chairman and CEO, Jamie Dimon, to continue to run the bank.

Williams charged in her lawsuit that JPMorgan Chase was keeping two sets of books and effectively making a monkey out of the U.S. Department of Justice by brazenly flouting the non-prosecution agreement it had signed with the Justice Department in a previous case. It came out in her deposition testimony, which is part of the court record, that one of the people being paid under her allegation of the bank keeping two sets of books was Tony Blair, the former Prime Minister of the U.K. (See our report: JPMorgan Whistleblower Names Former U.K. Prime Minister Tony Blair in Court Documents as Receiving “Emergency” Payments from Bank.)

In 2016 the Justice Department had charged that JPMorgan’s Asia subsidiary 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 involved the bank putting the children of high-ranking Chinese government officials on its payroll in order to enhance its business interests in China. In exchange for avoiding prosecution by receiving a non-prosecution agreement, the Justice Department required the bank to put in place compliance controls around third-party payments. Williams alleges, among other serious charges, that the so-called third-party payment controls were a sham and that when she blew the whistle to her superiors at the bank, JPMorgan Chase retaliated against her by firing her in October 2019.

Williams alleges the following was happening inside the bank to subvert the required compliance controls:

“If properly implemented, invoice controls would ensure that JPMorgan was not funding corruption by labeling corrupt third-party payments as legitimate business expenses.

“Williams also raised concerns because the Bank had no requirements for the Compliance group to review invoices for red flags, high risk indicators, or other anomalies that indicate corrupt payments; because the Bank granted many third-party intermediaries exemptions from invoice requirements without documenting or explaining the basis for doing so; because the Bank had no controls to ensure that the entity requesting payment was the same third-party intermediary that had contracted with the Bank; because the Bank had no controls to ensure that the third party intermediary had a contract or other agreement with the Bank before performing the services; and because the Bank could not reconcile actual payments with the invoices…

“Williams also raised concerns about JP Morgan’s inaccurate books and records. There were inconsistencies between the TPI [Third Party Intermediaries] payment records and the Bank’s centralized payment systems that feed into its general ledger. For example, a former government official (‘TPI1’) was a high risk JPMorgan third-party intermediary for Jamie Dimon (‘Dimon’), JPMorgan’s Chief Executive Officer. The Bank processed the invoices for TPI1 through the ‘emergency payment method.’ The Bank’s policies made clear that the ‘emergency payment method’ should be used for urgent payments critical to the day-to-day operations of Chase such as emergency utility bills ‘to prevent the lights from going out.’ The TPI1 invoices did not satisfy this standard, thus leaving the payment method open to unchecked corrupt payments and violations of the Bank’s accounting controls, the NPA, SEC Order, SEC rules and regulations, and provisions of Federal law relating to fraud against shareholders. Further, the payments as reflected in the general ledger did not correspond with management’s general or specific authorization for the invoice payments, thereby creating inaccurate records that also constituted violations of the NPA, the SEC Order, SEC rules and regulations and/or provisions of Federal law relating to fraud against shareholders.”

Williams’ lawsuit contains this additional allegation related to these invoices:

“Williams raised concerns that GACC [her department] was maintaining an alternate ledger of corrected transactions that did not match the uncorrected transactions on the official JPMorgan balance sheet.”

Raising judicial transparency alarm bells in this case, on January 6 Senior U.S. District Court Judge Jed Rakoff signed a dangerous Protective Order covering the lawsuit. The Protective Order that Rakoff approved permits large parts of the documents obtained during discovery to be stamped “Confidential.” It also indicates that if anyone leaks those confidential documents, they can be held in contempt of court. It then says that “…the Court is unlikely to seal or otherwise afford confidential treatment to any Discovery Material introduced in evidence at trial, even if such material has previously been sealed or designated as Confidential.”

Of course, if JPMorgan Chase knew it was never going to let this case go before a jury trial, then it had effectively gotten a Protective Order for eternity on key details of this case.

The law firm representing Williams is Vladeck, Raskin, & Clark P.C., which describes itself as follows: “Because we are prepared to take cases to trial, we are frequently successful in negotiating resolutions for our clients short of litigation. In fact, some of our biggest successes are settlements you will not find on our website or in reported decisions.” That business model might be good for plaintiffs seeking a monetary settlement in order to get on with their lives and the bottom line of lawyers. But it subverts the public interest in seeing actual justice served against a powerful mega bank and serial lawbreaker on Wall Street.

Despite the suggestion in the Protective Order that Rakoff “is unlikely to seal or otherwise afford confidential treatment to any Discovery Material introduced in evidence at trial,” there is this telling statement at Paragraph 16 of the Protective Order: “This protective order shall survive the termination of the litigation.”

The law firm representing JPMorgan Chase in the matter is Morgan, Lewis & Bochius, whose former law partner, Kenneth Polite, now heads the Criminal Division of the Justice Department. When Polite was confirmed by the Senate for the position, Morgan Lewis immediately issued a press release bragging about Polite’s impressive new role. In that press release, the law firm also bragged about their roster of lawyers that had also traveled through the revolving door, writing:

“For example, Matthew Miner, who prior to rejoining the firm in January 2020 served as the DOJ’s Deputy Assistant Attorney General; Sandra Moser previously served as former chief of the DOJ’s Fraud Section; Zane Memeger previously served as the United States Attorney for the Eastern District of Pennsylvania; and more than a dozen have served as AUSAs [Assistant U.S. Attorneys].”

This lucrative revolving door between the Justice Department and outside counsel for the serial lawbreaking Wall Street mega banks needs to be closed by Congress. Until it is, justice will continue to erode in the United States.

Related Article:

There Are Three Separate Cases in Federal Court Accusing JPMorgan Chase of a Culture of Fraud

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