The ‘Too Big to Jail’ Saga Continues; Today’s Deferred Prosecution Agreement With JPMorgan Chase Provides Yet Another Example of the DOJ’s Apparent Penchant to Coddle ‘Too Big to Fail’ Banks

Every time JPMorgan Chase is caught ripping off billions, all they have to do is
provide a billion-dollar payoff and nobody goes to jail. Jamie Dimon, chairman,
president and CEO of JPMorgan Chase. (Photo by Steve Jurvetson)

Note: The Department of Justice (DOJ) today announced a deal with the global megabank JPMorgan Chase to settle charges arising from the bank’s involvement in the infamous Bernie Madoff Ponzi scheme. According to court documents, the bank turned a blind eye to clear warning signs that demonstrated Madoff was swindling investors.

Statement by Lisa Gilbert, Director of Public Citizen’s Congress Watch Division
Today’s announcement of yet another deferred prosecution agreement against a megabank demonstrates the latest example of the DOJ’s predilection toward settling through the use of deferred prosecution agreements, instead of issuing indictments. It also underscores the continuing – and perhaps growing – “too big to jail” problem.

In this case, the bank effectively was enabling Madoff’s fraud. Under the terms of the deferred prosecution agreement, criminal charges will be deferred for two years in exchange for JPMorgan admitting to activities that violate anti-money laundering and bank secrecy laws, paying $1.7 billion to victims of the Madoff fraud and agreeing to remedy its internal compliance regime.

RELATED STORY: Chicago Alderwoman Proposes City Stop Business With JPMorgan After It Admits to Illegal Actions

As my op-ed with Mark Calabria from the Cato Institute explained, the DOJ opted to engage in a deferred prosecution agreement just over a year ago with another global megabank, HSBC – also for violations of anti-money laundering laws. It is still not clear in that case, or this one, whether the DOJ refused to bring charges because the department considered the bank “too big to jail.”

The public continues to be kept in the dark on whether large, complex financial institutions are being provided preferential treatment under the law. If such a policy exists, it must be made clear, once and for all. If the DOJ has decided to adopt a double standard for application of the criminal law, the public needs to know about it.