Manhattan U.S. Attorney Preet Bharara said an agreement requiring JPMorgan Chase & Co. (JPM) to pay $2.6 billion to resolve criminal and civil allegations that it failed to stop Bernard Madoff’s Ponzi scheme isn’t “the last big” money-laundering case his office will bring.
In a speech yesterday to the Association of Certified Anti-Money Laundering Specialists in New York, Bharara said his office decided to prosecute JPMorgan because the New York-based bank and its predecessors for years “ignored red flags” and allowed suspicious transactions to occur in Madoff’s account.
The JPMorgan accord that was announced this month, which includes a record Justice Department penalty for a violation of the Bank Secrecy Act, highlighted inadequate programs for policing money laundering. Bharara said it was an “aggressive action to take against the nation’s largest bank, but it was appropriately aggressive.”
“The Bank Secrecy Act is not merely a suggestion, and it has to be taken seriously,” Bharara said, according to a transcript. “It was not taken seriously by JPMorgan in dealing with Madoff, and the bank paid a price for it. And JPMorgan is not going to be the last big case that my office brings in this area, I can promise that.”
The top federal prosecutor in Manhattan also cited the money-laundering case filed against SAC Capital Advisors LP last year and the hedge fund’s decision to plead guilty and pay a penalty of $1.2 billion. A U.S. judge hasn’t decided whether she will accept the plea.
Addressing the issue of why no individuals were charged in the case, Bharara said “individual liability is not the whole of our discussion.”
“It should not be one or the other; individuals or institutions,” he said. “In my view, to effectively deter criminal conduct and to do justice, we need to do both.”
Joseph Evangelisti, a spokesman for JPMorgan, declined to comment on Bharara’s speech.
To contact the reporter on this story: Patricia Hurtado in Federal Court in Manhattan at