Skip to comments.JPMorgan Will Pay Record Breaking $13 Billion Justice Dept Fine (Holder strikes?)
Posted on 11/22/2013 5:13:27 AM PST by Liz
JP Morgan Chase has agreed to pay a record breaking fine to the Justice Department to settle federal and state lawsuits over the bank's mortgage-backed securities business at the height of the financial collapse, according to multiple reports. This is everything we know so far.
The Wall Street Journal reports J.P. Morgan Chase lawyers reached a tentative agreement late Friday night for a record breaking $13 billion settlement with the Justice Department that would relieve the bank from many state and federal lawsuits and investigations, after weeks of heated negotiations between lawyers representing both sides. This is the largest settlement ever paid to the federal government.
Attorney General Eric Holder, his deputy Tony West, and Stephen Cutler, the bank's general counsel, knocked out the initial terms of a deal last night, though things are still being finalized. The Journal explains what the settlement gets JPMC out of:
The deal does include a roughly $4 billion agreement with the Federal Housing Finance Agency to settle allegations that J.P. Morgan misled Fannie Mae FNMA +0.65% and Freddie Mac about the quality of loans it sold them in the run-up to the 2008 financial crisis, the person said.
The deal would also resolve a separate suit brought by New York state's attorney general, Eric Schneiderman, the person said.
So that equals out to $9 billion in fines and that separate $4 million going to relief for struggling home owners. Reuters is reporting the same numbers.
The settlement does not relieve JPMorgan from the Justice Department's ongoing criminal investigation of "the bank's issuance of mortgage-backed securities between 2005 and 2007," the Journal says. The criminal probe had lawyers for both sides at a gridlock: JPMC wanted the investigation dropped, but Holder refused, and then squeezed the bank for money, according to The New York Times:
The penalties eclipse what the bank previously offered to pay. Until now, JPMorgan was offering about $11 billion in total. And it was refusing to increase its offer until the Justice Department dropped a parallel criminal investigation into the banks sale of troubled mortgage securities to investors.
What this record breaking settlement means for JPMorgan chairman and CEO Jamie Dimon remains unclear. The bank recently set aside $23 billion to settle its numerous ongoing legal battles, and this single settlement took a major chunk out of that war chest. As Quartz's Tim Frenholtz outlined recently, this deal is really only the tip of the iceberg for JPMC, which is not a good sign for Dimon.
The pundit sharks have been swirling around Dimon lately, smelling blood in the water calling for his head on a platter. Few presented the argument against Dimon as articulately as Salon's Alex Pareene during a recent CNBC appearance:
I think that any time youre looking at the greatest fine in the history of Wall Street regulation, its really worth asking should this guy stay in his job. In any other industry I cant think of another industry. If you managed a restaurant, and it got the biggest health department fine in the history of restaurants, no one would say Yeah, but the restaurants making a lot of money. Theres only a little bit of poison in the food.
One person defending Dimon recently was the godfather of modern investing, Warren Buffett. If a cop follows you for 500 miles, youre going to get a ticket, Buffett told Andrew Ross Sorkin in an interview on CNBC this week. "And youve had a lot of cops been following a long time and theyre going to write some tickets."
Now Dimon has biggest ticket in history. So what happens next?
SUB-PRIME MORTGAGE SCAMS--MASSIVE LATINO MORTGAGE FRAUD ON CAPITOL HILL:
The Congressional Hispanic Institute, Inc, is an entity organized by Cong Joe Baca (D-Cali) in his capacity as head of the Congressional Hispanic Caucus.
Cong Baca created "HOGAR" (Spanish for home) in 2003 to work with the mortgage industry, F/M, lenders, banks and latino community groups to increase mortgage lending to what savvy observers consider to be unqualified Latinos.
"HOGAR" colluded w/ Cong Baca in what was to become a massive bilking of taxpayers. Cong Baca calculatedly hyped the fact that the national Latino homeownership rate was 47%, compared with 68% for the overall population.
HOGAR was coached to call the figure "alarming," and to say "a concerted effort was required to ensure that by the end of the decade Latinos will share equally in the American Dream of home ownership."
HOGAR and Cong Baca conned the public, failing to note that most of the "dreamers" were illegals, citizens of Third World countries who had violated US borders.
Predictably, HOGAR colluded w/ co-conspirators which included:
(a) shaky mortgage companies that ran into big trouble;
(b) Fannie Mae and Freddie Mac, both now under federal control after billions in taxpayer bailouts;
(c) Countrywide Financial Corp., sold to Bank of America Corp;
(d) Washington Mutual Inc., taken over by the US government and sold to J.P. Morgan Chase & Co.; and,
(e) New Century Financial Corp. and Ameriquest Mortgage Corp, both now defunct, killed by defaulted subprime Latino mortgages.
HOGAR's ties to the subprime mortgage industry were substantial. Bribery and self-dealing were rampant:
<><> Companies that donated $150,000 to Cong Baca got the right to have their own research fellow who would conduct fraudulent studies, which were cunningly used by industry lobbyists to pump lending.
<><> Bribery and extortion in the form of $100,000 annual donations to Cong Baca, for which HOGAR provided phony news releases from Cong Baca's Hispanic Caucus promoting a lender's commercial products to the Latino market,
<><> The most shocking example of bribery well-substantitated by Hogar's literature..... HOGAR announced it worked with Freddie Mac on a self-serving two-year examination of Latino homeownership in 63 congressional districts.
The "study" found Hispanic ownership on the rise thanks to "new flexible mortgage loan products" that the industry was adopting at the urging of Cong Baca's collusive coterie.
<><> HOGAR conned lenders into even more lenient down-payment and underwriting standards.
<><> As the subprime debacle unfolded, HOGAR declined repeated requests for comment despite the economic havoc their activities precipitated.
The mortgage schemes demonstrated the criminal activities of border violators with multiple identities---perhaps violent, terrorist-connected foreigners---colluding and conspiring to defraud private companies and public entities. And mortgage racketeering enterprises which employed sub rosa finance and business practices to carry out deceptions and frauds.
The alleged ring of swindlers---a Congresman, individuals with multiple identities, banks, insurance companies, mortgage brokers--might be charged with cheating the US govt, taxpayers and bank share holders out of hundreds of millions of dollars via an elaborate web of mortgage and bank frauds.
The mortgage Dreamers used multiple phony identities, fraudulent Social Security numbers, purchased from identity forgers in order to obtain govt-subsidized benefits.
L/E will find that individuals with multiple identities obtained fraudulent mortgages then flipped the houses at ever-higher prices to family member who then absconded to foreign countries, sticking banks (and taxpayers) with hundreds of millions in fraudulent mortgages.
BACKGROUND A Wall Street Journal investigative report related that, according to the Federal Financial Institutions Examination Council examination of the borrowing spree, uncovered financial schemes by low-income housing groups, Hispanic lawmakers, a congressional Hispanic housing initiative, mortgage lenders and brokers, all colluding in fraduent schemes to increase homeownership among Latinos with forged documents which enabled massive fraud.
This was not simply the mortgage market at work. It was fueled by avarice, greed, and Congressional enabling fraudulent practices. In 2005 alone, mortgages to Hispanics jumped by 29%; Latinos with multiple fraudulent identities in low-paying jobs obtained subprime mortgages for prime properties---soaring to 169%.
(Research provided by Wall Street Journal. Some material excerpted from the NY Times).
DEMS GETTING READY TO CASH-IN BIGTIME?: Obama says its time to turn the page on Fannie and Freddie
MarketWatch | 7/24/13 | FR Posted by illiac
Obama's speech on the US economy spelled out the beginning of the end for federally-controlled mortgage buyers Fannie Mae and Freddie Mac. Well work with both parties to turn the page on Fannie and Freddie, and build a housing finance system thats rock-solid for future generations, Obama said, according to a copy of his prepared remarks
The House Financial Services Committee approved a bill in July that would get rid of the firms in five years, to be replaced by a National Mortgage Market Utility to help "securitize" mortgages. (Excerpt) more at blogs.marketwatch.com
NOTE WELL---what Obama left out of his remarks Wall Street Journal report on page A15---article entitled Treasurys Fannie Mae Heist.
WSJ: The Federal government is seizing the substantial profits of the government-chartered mortgage firms, Fannie Mae and Freddie Mac, taking for itself the property and potential gains of private investors the government induced to help prop up these companies. This conduct is intolerable. A scathing article follows--a must read.
Fannie/Freddie are centerpieces of the criminal enterprise called the Democrat Party-where Dem cronies and collaborators loot the organization, get cushy jobs, bonuses, and the like.
Fannie Maes political machine dispensed campaign contributions, gave jobs to friends and relatives of legislators, hired armies of lobbyists (even paying lobbyists not to lobby against it), paid academics who wrote papers validating the home ownership mania, and spread charitable contributions to housing advocates across the congressional map.
Fannie Mae serves as an industrial-sized patronage factory sharing profits with political allies, spreading taxpayer funds to voting blocslike ethnic groups-and doling out jobsto left-wing academics, Washington has-beens and back-scratching buddies.
Obama insider Fannie Mae exec Jim Johnson got sweetheart loans from shady subprime Countrywide. Pols raked in six-figure salaries as F/F engaged in Enron-style accounting, plunged into debt and helped usher in the subprime housing meltdown through cockamamie lending practices.
Bill Clinton appointed Franklin Raines, Daley and Rahm Emanuel just as the quasi-governmental F/M engaged in rampant book-cooking so that F/M insider could help themselves to massive bonuses.
The Chi/Tribune exposed how political whore Rahm Emanuels profitable stint was low-show w/ no work involved. Emanuel was not even assigned to committees, according to company proxy statements. Immediately upon joining the board, Emanuel and other insiders qualified for $380,000 in stock and options plus a $20,000 annual fee, public records indicate. W/ Wall Street Rahm Emanuel at F/M, accounting tricks were used to mislead shareholders about outsize profits F/M reaped from risky investments.
The goal was to cook the books to keep fraudulent earnings on the books, to make Freddie Mac look profitable on paper-AND to fraudulently obtain humongous annual bonuses for Dem political insiders.
They made trillions, a could billion is nothing.
> Government Extortion.
Beat me to it. This regime sure has a thirst for money like none before it. I wonder how much of it is diverted into our corrupt politician’s pockets?
Research Herb and Marion Sandler of Golden West Financial if you haven’t already heard of them.
Looks like they’re trying to break the biggest bank. What next, NWO banking system owned and operated by the U.N.?
Anyone giving thought to where (Whose pocket) this slush fund is headed. If I was JP Morgan I would be telling Holder to go get the Army We ain’t paying. That’s period with a P.
And there’s $13 Billion that will go straight to the pockets of the democrat party and all its cronies.
They probably could've gotten by with just a fraction of that cost if they'd made a bigger contribution to emperor 0bama's last campaign.
Dimon's lawyers should demand Holder get HOGAR and that bunch that queered all the mortgages in the first place.
Remember that when the 2008 Chicago criminals landed in DC---they had their nefarious plans already mapped out.
(1) they took over the census and placed it under the control of the WH (now we know why---seems census job numbers were faked).
(2) Obama placed his COS Rahm Emanuel in control of the US Dept of the Treasury---"Wall Street Rahm" controlled all of Treasury's activities.
THE SMOKING GUN---WSJ REPORT--On Jan 20, 2009 Timothy Geithner was appointed Obama's Secy of the Treasury. But within three weeks, the Obama White House tightened its grip on Treasury. Obama put his COS, Rahm Emanuel, in charge of Treasury---Rahm Emanuel's dual role was an unusual move.
When he got to Treasury, WH COS Rahm Emanuel was so involved in the inner workings of the Treasury that the phrase "Rahm wants it" had become an unofficial mantra among subservient govt staffers, prostrate in obeisance, scurrying to accede to Rahm's wishes, according to Treasury government officials. Reported by WSJ / 05/31/09
More here: http://online.wsj.com/article/SB124113406528875137.html
(1) healthcare. guv collects enormous amts of personal info---INFO SIGNIFICANT TO THESE CHI/CON ARTISTS;
(2) Healthcare.guv is also a voter registration web site. God knows the damage the Chi/criminals will do with that info---if they ever get their filthy hands on it.
E-v-e-r-y conniving Democrat voted for O/Care---Nationalizing 1/6th of the US Economy into a Democrat Cash Cow. ALL the untraceable O/Care money from enrollments, fines, penalties, taxes and fees goes to your "reliable, trustworthy government."
"LETS MAKE A DEAL, DEMOCRATS." Vote aye now. When the millions start rolling in, you get a piece of the action.
(cackle0 Frankly, I'm s-o-o-o afraid good ol' Chicago Val/Jar got Carpel-Tunnel Syndrome setting up all those offshore accounts....including Dem/pols who sold their aye votes for a percentage.....and other corrupt Dem insiders and Dem scumbags......
.....all of 'em salivating over the hundreds of millions of O/care dollars they thought would be pouring in by now (sob).
OMG---I just hope Mrs O did not have to cancel her order for new diamonds---she might actually be forced to wear her old diamonds (wipes away tears).
Mrs O wore her pricey diamond bangles (bought on a govt salary?) at a Texas DNC fund-raiser. She wowed those "tolerant and compassionate" Dems....raising big bucks to keep Mr O in office so he could work for "the poor."
Mrs O's diamond Gothic cuff was priced at $15,350 set with 2.17 carats in diamonds and the Quatrefoil bracelet at $11,800 set with 1.73 carats in diamonds.
How many people are going to jail for this supposed massive fraud? If none, then it is a bare-faced shakedown.
Of course it’s a shakedown-—this is untraceable money.
Holder gets it and does not have to tell what he did with it.
They have made a hell of a lot more than that from the bailouts from the Government,how much interest are you getting in your savings accounts.This is chump change for these blood sucking bastards
JPMorgan Chase has tentatively agreed to pay the Department of Justice a record $13 billion settlement to resolve several civil probes relating to residential mortgage-backed securities a costly deal that still doesnt protect the bank against additional criminal prosecutions.
The settlement, revealed Saturday, would be the largest lump payout the US government has ever asked of an individual company.
This is a basic and fundamental attack on capitalism, declared Dick Bove, an influential bank analyst at Rafferty Capital. It is possible that the government is taking away the property of the JPMorgan shareholders without the shareholders having committed any crime or having any say in the expropriation of these funds.
Under the settlement, JPMorgan must continue to cooperate with federal investigators probing the banking giants issuance of mortgage-backed securities from 2005 to 2007, according to sources.Still to be ironed out are how to resolve that criminal investigation, along with the wording of any admissions of culpability the feds might require.
The general terms of the settlement deal were forged Friday in a phone conversation between Attorney General Eric Holder and JPMorgan CEO Jamie Dimon, The Wall Street Journal reported.
Analysts called the settlement a raw deal given that, by JPMorgans own estimate, some 80 percent of its mortgage-backed securities had been acquired at the request of the government, when it bought Bear Stearns and Washington Mutual in 2008.
I just think that these banks like JPMorgan are being whacked like a pinata, said Doug Kass, a hedge-fund manager at Seabreeze Partners. This sounds like a raw deal for JPMorgan and shareholders, Kass said. Ultimately, the earnings power of banks is being regulated out of them from the [Securities and Exchange Commission], from the Department of Justice, Kass added.
The settlement sum includes $4 billion that JPMorgan agreed this month to pay the Federal Housing Finance Agency to resolve allegations that the bank misled mortgage-finance companies Fannie Mae and Freddie Mac about the quality of loans it sold them prior to the 2008 financial crisis, the Journal reported.
Just have J. P. Morgan make the check out directly to HealthCare.gov.
Does that money go directly to DNC coffers, or is it laundered first?
And who is JP Morgan going to get that money from?
(Sneer)---there's zillions of ways to launder the $14B---IF Dimon is foolish enough to hand it over to the Chicago criminals in the WH.
These criminal are consummate con artists---they can make money disappear faster than a cream puff at a Weight Watchers weigh-in. There are numerous ways the connivers juggle money around to benefit themselves.
CASE IN POINT---When he went to jail, investigators found Ponzi King Bernie Madoff had stashed billions offshore---into a labyrinth of financial entities.
COLLUSION AND CONSPIRACIES GALORE Some $8.9 billion was funneled to Madoff through a dozen so-called feeder funds based in Europe, the Caribbean and Central America......a labyrinth of hedge funds, management companies and service providers that, to unsuspecting outsiders, seemed to compose a formidable system of checks and balances.
But the purpose of this complex architecture was just the opposite: the feeder funds provided different modes for directing money to Madoff in order to avoid scrutiny and generate more fees.
WIKI.COM Stanley Chais, a philanthropist who invested heavily with Mr. Madoff, and Carl J. Shapiro, one of the money manager's oldest friends, are among at least eight Madoff investors and associates being scrutinized by the U.S. attorney's office in Manhattan. Prosecutors are continuing to probe Madoff family members and employees.
Others include: Frank Avellino, a Florida accountant who ran an investment fund that invested client money; Noel Levine, a real-estate investor who works out of a two-room office on the 17th floor, next door to Madoff's fraudulent investment operation, and Palm Beach investor Robert Jaffe, a son-in-law of Mr. Shapiro who referred potential investors to Madoff. 
Madoff Securities International Ltd.----In 2008, about $1 billion was transferred last between Madoffs U.S. firm and Madoff Securities International Ltd. in London.  On March 24, 2009 Judge Louis L. Stanton granted power of attorney to Irving Picard, trustee, over Madoff's controlling stake in London.
Authorities in the U.K. are seeking evidence of money laundering involving the London business, Madoff Securities International Ltd., which opened in 1983 as a separate legal entity from Mr. Madoff's U.S. New York office. He allegedly sent more than $250 million beginning as early as 2002, from his New York-based firm, Bernard L. Madoff Investment Securities LLC, to the U.K. office and then back to accounts in the U.S.
In 2000, Madoff began to add staff and expand the operation, and loaned the business $62.5 million. He had a staff of 25, including traders, managers and support. Instructions to staff was that they communicate with Madoff Securities through personal e-mail accounts, not through company e-mail.
There were nine directors. Family members with shares included Mark and Andrew Madoff, Peter Madoff, and Bernard himself. Ruth Madoff, Bernard Madoff's wife, also held shares.  Non-family members with shares included Maurice J. "Sonny" Cohn. Madoff and Cohn were shareholders in Cohmad Securities, which steered investors to Mr. Madoff's advisory business.
In 1987, Mr. Cohn had shares of Madoff Holdings Ltd., a predecessor to the current London firm. In 1998, Mr. Cohn held 35,624 non-voting shares, some of which he transferred to "BL Madoff" in 1998, and the rest that he "disposed of" in 2004.
Paul Konigsberg, a New York City accountant and a longtime friend for more than 25 years, prepared two Madoff Family Foundation tax returns, and received the non-voting shares, valued at $35,000. He did work for the London office when it was first opened.  A general ledger of Madoff accounts listed Konigsberg, of the reputable accounting firm of Konigsberg, Wolf & Co., as receiving $30,000 a month to advise the MSIL operations, and funnel client checks to the London office for Madoff's own use.
Clients were often directed to Mr. Konigsberg by Mr. Madoff and his family. Mr. Konigsberg prepared the tax returns of foundations of six other families, many of which have lost millions, even hundreds of millions, of dollars. He also represented scores of individual Madoff investors.
Mr. Konigsberg's firm has received a civil subpoena from the SEC. His Madoff-related clients included Carl and Ruth Shapiro, Boston philanthropists whose foundation lost $145 million, and whose son-in-law, Robert M. Jaffe, under investigation, is a Madoff business partner.
Konigsberg held Madoff accounts under his name including two in the name of the Westlake Foundation. Paul J. and Judith Konigsberg are officers and directors of the foundation. He owns homes in his wife, Judith's name in Greenwich, Connecticut and Palm Beach Gardens, Florida.
On April 20, 2009, Steven Leber filed a $4 million lawsuit against Konigsberg and his accounting firm for negligence, and breach of fiduciary duty. Konigsberg answered the charges with affirmative defenses.
Evidence is being gathered by investigators on a U.S.-U.K. task force that Konigsberg and Levy, a real-estate mogul and philanthropist are believed to be involved in an international transfer of money. Levy is believed to have helped Paul Konigsberg funnel checks to London. And investigators in New York say there were billions of dollars worth of checks going back and forth between Madoff and Levy.
Ruth and Bernie Madoff had an intimate relationship with Levy and his wife, Betty. Madoff was long known to have been Levy's "fixer," obtaining everything from choice restaurant reservations to emergency medical care. Levy had offices one floor below Madoff's in New Yorks Lipstick Building. It was Levy who introduced high-profile investors to Madoff.
Jeanne Levy-Church's losses forced her to shut her JEHT Foundation and her parents foundation, the Betty and Norman F. Levy Foundation, lost $244 million. JEH helped the less fortunate, especially ex-convicts.
“So that equals out to $9 billion in fines and that separate $4 million going to relief for struggling home owners. Reuters is reporting the same numbers.”
Yeh, that 4 million will really make a difference!
(B) They need to mobilize the Bank Secrecy Act---in which banks are required to establish, implement and maintain programs designed to detect and report suspicious activity indicative of money laundering and other financial crimes.
The Bank Secrecy Act was enacted to protect the public from harm by identifying and detecting money laundering from criminal enterprises, terrorism, tax evasion or other unlawful activities, the special agent in charge for Internal Revenue Service Criminal Investigation, explained.
<><> Joint bank accounts might be used to facilitate the transfer of of govt funds. Monies may pay for personal and private expenses, credit cards, real estate sunsidies and vehicle purchases.
<><> To cover their tracks, fake invoices might be created to show that money deposited into accounts was being used for legitimate investment purposes.
The scheme might be advanced by issuing phony statements of payments from financial sources that actually covered the transfer of funds for DNC/admin insiders own use.
<><> L/E is directed to get ahold of: (1) copies of DNC checks, (2) wire transfers, (3) account statements, (4) invoices, (5) bills, (6) delivery tickets, (7) correspondence including e-mail, contracts, loan agreements, and, (8) any other books or records. L/E should also explore (a) monies paid to brokers, sub-brokers, (b) family members, (c) mortgage brokers, (d) financial managers, and, (e) real estate agents, brokers, and developers.
<><> L/E should scrutinize DNC bank accounts for suspicious activites: (A) large deposits, (B) funds transferred from one account into another, (C) frequent requests for withdrawals.
This whole banking stock market bogus money stuff has nothing to do with us little folk anymore, except to figure out ways to get what we've still got.
Russian police said that they uncovered a money-laundering scheme in which more than 400 people were involved in transferring $1.1 billion out of the country. Several commercial banks and about 100 Russian and foreign companies -- some of which were so-called "one-day companies" -- were used to funnel the money abroad, the Interior Ministry said in a statement.
The money was used for real estate purchases in Cyprus, Republic of Panama and the Baltic states. In more than five years of operations, the criminal organization earned a 2 percent profit on the transfers, amounting to about $17.3 million, police said. Police arrested seven people considered to be leaders of the organization, including a 42-year-old man thought to be the head of the operation, tagged RIA Novosti.
The man's name was not reported.
During the investigation, police confiscated more than $30 million in a total of 85 searches. One-day companies -- companies created to exist as little as a few hours -- were used to transfer the money, officials said.
Of the 3.9 million companies in Russia, just 2 million are real, the Central Bank said. Deputy Prime Minister Igor Shuvalov said one-day companies prevent up to $30 billion from going into the government's tax revenues each year.
If Holder really wanted justice, Chris Dodd and Barney Frank would be pounding big rocks into smaller rocks at Leavenworth.
No Morgan did not make trillions.
Seeing as how the govt demanded the banks engage in subprime loans which would fail, why should the govt not bail them out of the mess caused by that policy?
Shows the deranged twisted mind of the “progressive” in the Wh.....
As a community organizer he sued banks to give loans to losers and ne’er do wells-—SSI and food stamps were considered “income.
Now as president, he’s suing the banks for predator lending -— “burdening the poor” w/ loans they cant pay back.
....he belongs in a nut house.....not the WH.......
Now as president, hes suing the banks for predator lending
he belongs in a nut house
Well, this is the Alinsky MO. You don't have to make sense...just get and maintain power no matter what.