J.P. Morgan Chase Hit For $461M For Madoff-Related Bank Secrecy Act Violations

January 7, 2014

Risk Operations Compliance

The Financial Crimes Enforcement Network (FinCEN)  today fined J.P. Morgan Chase Bank, N.A. $461 million for willfully violating the Bank Secrecy Act (BSA) by failing to report suspicious transactions arising out of Bernard L. Madoff’s decades-long, multi-billion dollar fraudulent investment scheme. In consenting to the civil money penalty, JPMorgan admitted to the facts set forth by FinCEN and that its conduct violated the Bank Secrecy Act.

FinCEN’s anti-money laundering regulations require financial institutions to report transactions to FinCEN that the financial institution “knows, suspects, or has reason to suspect” are suspicious. Among other things, a transaction is “suspicious” if it involves funds derived from illegal activities, or is conducted to disguise the funds derived from illegal activities, and the financial institution knows of no reasonable explanation for the transaction. FinCEN then makes these suspicious activity reports available to law enforcement and regulators, such as the Securities and Exchange Commission, to pursue…

View original post 1,866 more words