U.S. States Department of Treasury Versus Jp Morgan Chase

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The case I will be discussing in my PowerPoint presentation is the United States of America Department of Treasury versus JP Morgan Chase Bank, N.A. Columbus, OH. J.P. Morgan Chase is a global bank and financial services institution and is part of the largest bank holding company in the United States with $2.5 trillion in assets, and is required to adhere to the Bank Secrecy Act and its regulations. The Financial Crimes Enforcement Network a bureau of the U.S. Department of Treasury with authority to investigate banks for violations of the Bank Secrecy Act determined that JP Morgan violated the Bank Secrecy Act, 31 U.S.C. §5318(g) and 31 C.F.R. § 1020.320, by failing to detect and adequately report suspicious transactions arising out of Bernard Madoff’s fraudulent investment scheme and failure to maintain an effective anti-money laundering program. The Bank Secrecy Act, requires banks to report transactions that involve or aggregate to at least $10,000 and are conducted through the bank and the bank has reason to suspect are suspicious. The definition of a suspicious transaction would be (1) involves funds from illegal activities; (2) designed to evade the reporting of the Bank Secrecy Act; or (3) has no business or apparent lawful purpose and the bank knows of no reasonable explanation for the transaction after examining the available facts, including background and possible purpose of the transaction. JPMorgan Chase had a 20 year relationship with Barnard L. Madoff Investment Securities LLC (“BLM”); during most of this time JP Morgan held the primary accounts that Madoff used to conduct his fraudulent Ponzi scheme. Between 2006 and 2008, JPMorgan conducted several internal due diligence reviews on BLM and identified multiple potential fraudulent “red flags” associated with BLM. On a number of occasions between 1990 through 2003 JPMorgan personnel
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