Three weeks ago, when we first reported that JPMorgan – the bank that this week was slammed with a record settlement of nearly $1 billion when it admitted it had manipulated and spoofed the gold and Treasury markets – was probing its employees’ role in abuse of PPP funds following reports of “instances in which Covid-relief funds were misused by customers and is probing employees’ involvement in the potentially illegal activities”, we said that it was about time the role of banks was put under the microscope because ” while it was easy to blame the administration for rushing to hand out hundreds of billions in grants/loans (without which the US economy would still be in a depression), a key question is how and why did the private banks that were gatekeepers for all this capital, allow such abuse to take place.”
A few days later, we also found out that not only did JPM employees allegedly enable fraud by clients when obtaining PPP loans, the largest US bank also found that some of its employees themselves “improperly applied for and received”, i.e. stole, Covid-relief money that was intended for legitimate U.S. businesses hurt by the pandemic.
The bank discovered the actions, which were tied to the Economic Injury Disaster Loan program, “after noticing that suspicious amounts of money had been deposited into checking accounts owned by bank employees.” The findings prompted an unusual all-staff message from JPMorgan Tuesday which according to Bloomberg “puzzled many across the industry for its candid admission of potentially illegal acts by some of its own while not describing what they had done.”
At the time, JPMorgan sent a memo to its roughly 256,000 employees in which senior leaders said they had seen “instances of customers misusing Paycheck Protection Program Loans, unemployment benefits and other government programs” and that some employees had fallen short on ethical standards, too.
JPMorgan tried to mitigate this discovery by claiming that only a handful of its employees were abusing the program.
Well, fast forward to today, when we learn that more than 500 JPMorgan employees got assistance from taxpayers aimed at helping businesses through the pandemic “and dozens of them shouldn’t have”, according to Bloomberg.
The discovery that so many people at the largest and most profitable U.S.