NEW YORK, N.Y. – A judge on Wednesday approved a non-prosecution agreement reached after JPMorgan Chase & Co. agreed to pay $1.7 billion to settle criminal charges stemming from its failure to report its concerns about Wall Street swindler Bernard Madoff’s private investment service.
U.S. District Judge Kevin Castel said there was nothing about the deal between the nation’s largest bank and the government that would “require judicial intervention to protect the integrity of the process.” He said it seemed the agreement was “knowing and voluntary” and in the best interests of the public.
The judge’s approval came a day after the deal was announced in Manhattan by federal authorities. The agreement requires the bank to pay the $1.7 billion forfeiture — the largest by a U.S. bank for a Bank Secrecy Act violation — and to acknowledge failures in its protections against money laundering and reform them.
The judge set a January 2016 court date for the government to report whether the bank has complied with the agreement.
JPMorgan will pay more than $2.5 billion in total to settle claims stemming from Madoff’s fraud, which was revealed in December 2008, when he ran out of money to honour requests for withdrawals by thousands of investors. Less than $300 million of their original investment of nearly $20 billion remained, although Madoff had sent statements only days earlier claiming it had grown to more than $60 billion.
Madoff, 75, pleaded guilty to fraud. He’s in prison in Butner, N.C., serving a 150-year sentence.
Federal prosecutors brought two Bank Secrecy Act counts against JPMorgan, one for lax money laundering monitoring and the other because the bank failed to report to U.S. authorities in 2008 that its London office had circulated a memo saying it couldn’t validate Madoff’s trading activity or custody of assets and citing his “odd choice” of a one-man accounting firm.
JPMorgan, which was the primary bank handling Madoff’s accounts since 1986, acknowledged in a statement Tuesday that it could have done better. It said it was making “significant efforts” to strengthen its practices against money laundering and believed “the lessons we have learned will make us a stronger company.”
A company spokeswoman didn’t immediately return a message seeking comment Wednesday.