Bernie Madoff: I Helped Nail JPMorgan

Saturday, 14 Dec 2013 05:24 PM

By Sandy Fitzgerald

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Bernie Madoff sent an email from prison to boast Friday that he helped regulators investigate JPMorgan Chase & Co. on complaints that it willingly turned a blind eye to his criminal activities, the New York Post reports.

Madoff claims he gave the Treasury Inspector General's office "key information" that it passed up to eventually be used by prosecutors in Manhattan, the Post report says. His email was sent to NBC correspondent Scott Cohn.

Earlier this week, Manhattan U.S. Attorney Preet Bharara brought action against the bank, announcing that it could face up to $2 billion in penalties for letting Madoff's scams go on.

Madoff offered no real proof that he had identified JPMorgan or other banks of his scheme to defraud more than $20 billion from investors. But the 75-year-old felon, who was sentenced to 150 years in the Butner, N.C., Federal Correctional Complex, used JPMorgan as his primary bank for more than 20 years.

HSBC and UBS, two other banks, are also under government investigation for their alleged roles in Madoff's activities, sources told the Post, along with JPMorgan and other banks.

If the court rules against JPMorgan, as much as half the fines could be be handed over to Richard Breeden, who has been assigned as a "special master" by the Justice Department to dole out recovered funds to Madoff's victims.

Sources also told the Post that victims are considering separate action against the government if their losses aren't returned in whole, before the government takes its cut.

"From an equitable point of view, what should really happen is that victims — and anyone who has a claim — should be made whole," said Joseph Sarachek, a bankruptcy claims specialist with CRT Special Investments. Right now, at the end of the day, the victim’s aren’t getting paid."

However, critics say Irving Picard, the trustee overseeing the liquidation of assets from Bernard L. Madoff Securities, should be the one to handle any additional funds seized.

“The logical thing for [the US government] to do is for them to publish a clear set of instructions as to how the claims process is going to work,” Sarachek said. “Right now for victims it’s very murky."

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