According to a Freedom of Information Act response received by Wall Street On Parade, Federal law enforcement may share the blame with JPMorgan Chase for allowing Bernard Madoff’s Ponzi scheme to be perpetuated for so long.
On January 7 of this year in a press conference called to announce felony charges against JPMorgan Chase for its role in the Madoff Ponzi scheme, U.S. Attorney Preet Bharara, FBI Assistant Director-in-Charge George Venizelos, and the Director of the Financial Crimes Enforcement Network, Jennifer Shasky Calvery, took turns at the podium excoriating JPMorgan for observing brazen, long-term money laundering activity occurring under its nose in the business bank account it held for Bernard Madoff while ignoring its legally mandated duty to file a Suspicious Activity Report (SAR) with the federal government.
The Financial Crimes Enforcement Network, known throughout Wall Street and the banking world as FinCEN, is a bureau of the U.S. Treasury Department that receives the SARs and is tasked with making sure the reports are seriously investigated.
JPMorgan Chase and its predecessor banks, Chase Manhattan and Chemical, oversaw Madoff’s primary business account for more than 20 years. During that time, flagrant money laundering signs should have set off automated bells, whistles and sirens inside the banks and triggered repeated SARs to FinCEN. None were filed by JPMorgan or its predecessor banks according to U.S. law enforcement until after Madoff turned himself in.
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