New York State Has Turned Over a Vast Amount of Its Financial Affairs to 5-Count Felon JPMorgan Chase

10 Jan 2024

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New York State Has Turned Over a Vast Amount of Its Financial Affairs to
5-Count Felon JPMorgan Chase

By Pam Martens and Russ Martens: January 10, 2024 ~

New York State Comptroller, Thomas DiNapoli
New York State Comptroller, Thomas DiNapoli

There’s only one thing more dangerous than the largest bank in the United
States, JPMorgan Chase, being charged with (and admitting to) five criminal
felony counts by the U.S. Department of Justice since 2014 and a host of
other fraud charges by federal regulators. What is more dangerous is having
government officials look the other way at this recidivist history of crime
at the nation’s largest bank.

In May, federal banking regulators allowed JPMorgan Chase to get even
bigger, despite its unprecedented crime wave, by handing it the failed
First Republic Bank in a sweetheart deal.

Yesterday, we learned from online documents that the Comptroller of New
York State has turned over a vast amount of the financial affairs of the
fourth largest state in the country to this banking house of crime. (See
related articles below.)

According to a New York State Comptroller website, JPMorgan Chase has 59
contracts with the state with a total current contract amount of $5.2
billion. The contracts include everything from banking services to the
purchasing cards for state employees.

The New York State Comptroller is Thomas DiNapoli, who has held this
no-term-limit position since February 7, 2007 – a span of 17 years.
DiNapoli’s job description reads as follows: “The comptroller is the chief
financial officer of the state government and the head of the Department of
Audit and Control. The comptroller’s responsibilities include managing the
state’s pension fund, auditing the spending practices of all state agencies
and local governments, reporting on state finances, and serving as the
custodian of unclaimed funds.”

As it turns out, JPMorgan Chase has a 7-year contract with the
Comptroller’s office to serve as the custodian for the securities held in
the New York State Common Retirement Fund for state workers. As of
September 30, 2023, the Common Retirement Fund had a value of almost a
quarter of a trillion dollars, or $246.3 billion to be exact.

But the Comptroller does not want the public to know all of the granular
details in its contract between JPMorgan Chase and itself. Numerous
paragraphs are blacked out in the document.

According to the Common Retirement Fund’s Annual Report, JPMorgan Chase –
not the Comptroller or the Fund’s auditor – calculates the rate of return
for the fund. That return was indicated as “negative 4.14 percent, gross of
certain investment fees” for the fiscal year ending March 31, 2023.

How large is this custodial business at JPMorgan Chase, which holds so many
securities for other parties?

On November 24, 2020, the Office of the Comptroller of the Currency (OCC),
the federal regulator of national banks, fined JPMorgan Chase $250 million
for “failure to maintain adequate internal controls and internal audit over
its fiduciary business.” That business includes its custodial business. The
OCC Consent Order related to that fine revealed the following:

“The Bank maintains one of the world’s largest and most complex fiduciary
businesses with total fiduciary and related assets of $29.1 trillion,
including $1.3 trillion in fiduciary assets and $27.8 trillion of
non-fiduciary custody assets.”

To put that $29.1 trillion into the proper perspective, the Federal Deposit
Insurance Corporation (FDIC) reports that as of September 30, 2023 there
were 4,049 commercial banks in the U.S. The total assets of those 4,049
banks was $22.2 trillion. But, somehow, just one of those banks has
attracted $27.8 trillion of assets for which it serves as custodian.

Is there some secret sauce that JPMorgan Chase has going for it to attract
all of that money?

In September 2020, when the International Consortium of Investigative
Journalists (ICIJ) released a bombshell investigative report about money
laundering for criminals at some of the largest Wall Street banks, it had
quite a bit to say about JPMorgan Chase. (The ICIJ investigation was based
on secret documents leaked from FinCEN, the Financial Crimes Enforcement
Network, a unit of the U.S. Treasury.)

According to the ICIJ report, JPMorgan Chase was involved in moving illicit
funds for the fugitive, Jho Low, involving the notorious looting of public
funds in Malaysia. Jho Low has been accused by multiple jurisdictions of
playing a key role in the embezzlement of more than $4.5 billion from a
Malaysian economic development fund, 1MDB. JPMorgan Chase moved $1.2
billion in money for Jho Low from 2013 to 2016, according to the report.

The ICIJ report also found that JPMorgan “processed more than $50 million
in payments over a decade…for Paul Manafort, the former campaign manager
for President Donald Trump. The bank shuttled at least $6.9 million in
Manafort transactions in the 14 months after he resigned from the campaign
amid a swirl of money laundering and corruption allegations spawning from
his work with a pro-Russian political party in Ukraine.”

Equally troubling activity at JPMorgan Chase includes the following,
according to ICIJ investigators:

“JPMorgan also moved money for companies and people tied to corruption
scandals in Venezuela that have helped create one of the world’s worst
humanitarian crises. One in three Venezuelans is not getting enough to eat,
the UN reported this year, and millions have fled the country.

“One of the Venezuelans who got help from JPMorgan was Alejandro ‘Piojo’
Isturiz, a former government official who has been charged by U.S.
authorities as a player in an international money laundering scheme.
Prosecutors allege that between 2011 and 2013 Isturiz and others solicited
bribes to rig government energy contracts. The bank moved more than $63
million for companies linked to Isturiz and the money laundering scheme
between 2012 and 2016, the FinCEN Files show…”

Wall Street banks like JPMorgan Chase are legally required to follow the
“KYC” rule (Know Your Customer) in order to avoid moving money around for
criminals. But the ICIJ investigators reveal that JPMorgan Chase paid
little attention to that rule.

Less than six months ago, JPMorgan Chase settled two separate federal
lawsuits against it for actively participating in Jeffrey Epstein’s sex
trafficking of minors enterprise by turning a blind eye to glaring red
flags and failing to file the legally mandated Suspicious Activity Reports
(SARs) as Epstein took upwards of $40,000 to $80,000 in hard cash monthly
from his accounts at the bank over a decade. In return, Epstein referred
ultra wealthy clients to the bank according to court documents.

JPMorgan Chase previously admitted in 2014 to two criminal charges brought
by the U.S. Department of Justice for banking Bernie Madoff’s Ponzi scheme
for decades (that devastated the finances of thousands of retirees) and
ignoring its legal obligation to file SARs with the Financial Crimes
Enforcement Network (FinCEN). The settlement with the Justice Department
included a penalty of $1.7 billion in restitution to Madoff victims and a
promise to reform its anti-money laundering compliance programs.

The text of JPMorgan’s contract with the New York State Comptroller to
custody assets for the Common Retirement Fund indicates that the New York
State Comptroller found the bank to be a “responsible” entity.

Yesterday, we emailed the press office for the Comptroller and listed the
nature of the five felony counts the bank has admitted to since 2014. We
inquired if the Comptroller was aware of these charges. The response was
that there would be no comment from the Comptroller’s office to our
questions.

New York State Has Turned Over a Vast Amount of Its Financial Affairs to 5-Count Felon JPMorgan Chase

Gunnar Larson