In an internal memo on Tuesday, JPMorgan Chase said that it had found evidence of employees and clients misusing coronavirus relief funds and would cooperate with authorities to investigate the potentially illegal activity.
The bank’s operating committee, led by CEO Jamie Dimon, sent an internal memo to more than 250,000 employees on Tuesday morning announcing that it had found evidence of wrongdoing, Bloomberg first reported.
“Unfortunately, we’ve also seen conduct that does not live up to our business and ethical principles — and may even be illegal,” the bank’s committee said.
JPMorgan said that it had found “instances of customers misusing Paycheck Protection Program (PPP) loans, unemployment benefits and other government programs,” according to the memo.
The bank also announced that “some employees have fallen short, too,” with regards to misusing federal funds meant to help small businesses and other customers hurt by the coronavirus pandemic—though the report gave no details of specific employee misconduct.
U.S. lawmakers and investigators have been warning for months now of widespread abuse and fraud in the PPP, with multiple perpetrators charged for misusing funds to purchase Lamborghinis and other luxury items.
JPMorgan, which is the biggest U.S. lender by assets, was also the biggest issuer of PPP loans, doling out nearly $30 billion through the program, according to the Small Business Administration.
“We are doing all we can to identify those instances [of wrongdoing], and cooperate with law enforcement where appropriate,” JPMorgan said.
Fraud experts have warned that the federal government’s massive $2.2 trillion coronavirus relief package, which included the over $650 billion Paycheck Protection Program for small businesses, was rife for abuse given its sheer scope. Despite that fact, the program is widely considered to have worked in the way it was supposed to—by saving more than 50 million jobs in the short-term, according to the Trump Administration. The U.S. Justice Department has already kicked off enforcement efforts, previously subpoenaing Wall Street banks for records on PPP lending, Reuters reported in May. Just last week, a congressional panel said that it had identified tens of thousands of PPP loans—worth billions of dollars—that may have been subject to fraud or abuse, with some companies that were ineligible receiving funds or breaking the rules by taking multiple loans, according to Reuters.
What to watch for
Lawmakers in Congress have been deadlocked for weeks over extending the pandemic relief program. Democrats and Republicans have repeatedly failed to compromise on the size or provisions of the next coronavirus stimulus bill, with the GOP advocating for a smaller and more narrow relief package.
Report Alleges More Than $1 Billion In Bad PPP Loans As Feds Make Another Arrest (Forbes)
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