Madoff could not have carried out his fraud without banks, and his financial institution of choice was JPMorgan Chase. While Madoff told his investment advisory clients that he was investing their money in stocks, he was in fact simply depositing the funds in a Chase bank account.
Federal prosecutors said Chase should have known it was being used to commit fraud, and in 2014 they charged the bank with two felony counts for failing to maintain adequate controls. But in a deferred prosecution agreement, the feds said they would drop the charges if, within two years, the bank adopted a proper compliance system and paid $2.6 billion in fines and penalties.
The agreement did not require the bank to publicly disclose the changes it made, but in 2016, the feds kept up their end of the bargain. They told a federal judge that they were dropping the case after the bank instituted unspecified reforms and paid the money, which amounts to about 10 days of revenue.
Hear more about the major figures in the scandal, and about Madoff’s life behind bars, in a special American Greed podcast series: Madoff: Ten Years Later. Subscribe on Apple Podcasts, or wherever you listen.