Economic Fraud by JP Morgan Chase and the Government

While it’s well known that banks destroyed the economy, it’s not known what exactly happened during the 2008 crisis. Phrases like “toxic assets” and “securities fraud” float around, but does anyone really know precisely what occurred behind closed doors at one of the biggest banks in the world?

Whistleblower Alayne Fleischmann does. Her story brings to the public details that would have been forever lost, if a certain group of people had their way.

The cliff’s notes version of the article is as follows:

• In 2006, JP Morgan Chase began taking on toxic assets. At the time, the mortgage market was booming. The company may have assumed that it would continue gaining profits over time regardless of what they did.

• Fleischmann was discouraged from sending e-mails to her boss regarding her concerns about the company standing to lose massive amounts of money. When she wrote a physical letter about those same concerns, she assumed that the company would stop because evidence existed that they knew what was going on. This would mean they would not be able to say they didn’t know about the problem in court.

• From 2008, when the market began collapsing, to the present day of 2014, the Department of Justice has not only failed to prosecute anyone in JP Morgan Chase, but has instead accepted bribes called fines in exchange for looking the other way. Thus far, no one at Chase has been brought up on charges, much less been convicted of anything.

Why did this occur? And why are the banks still getting away with all manner of crimes while they laugh all the way to record profits? The banks were ordinarily held in check by rules and regulations which prevented them from engaging in fraudulent practices. The fraud, in this case, was Chase, as a company, exaggerating the value of their investments. They deliberately chose to fudge their underwriting whistleblowerprocess.

When this first occurred, the government should have stepped in. Regulations dictate what penalties exist for what behavior. Yet, no one actually enforced those regulations. Where Chase was concerned, the regulations meant little more than suggestions. A lack of enforcement had turned absolute laws which were always to obeyed into flimsy laws that could be disregarded at any time. It took a whistleblower for someone to step in.

The government’s reasoning for refusing to prosecute Chase and other banks like it lies in the fines that banks have to pay to get out of being summoned to court for the crimes they committed. As more and more violations occur, more and more fines are being paid. The government was, and continues to be, happy to accept money in exchange for dismissing charges. The simple reality of it all is this: an individual can break the law with impunity as long as they have the money to pay for it.

Publicly, US Attorney General Eric Holder cited the “economic harm” that would come from throwing the book at people who broke the law. Even while the government had a star whistleblower witness in Fleischmann, who had been on the inside and had seen it all, they refused to go forward with any effort at prosecution.

The results are plainly evident to see today. Chase has become a company that has broken so many laws that one writer calls it “Mostly a Criminal Enterprise.” There might be even less incentive for Chase to follow the rules now than in 2006 when the problem became apparent. It can defraud, steal, cheat, lie, do whatever it pleases so long as it has the money to bribe the Justice Department into not bringing them to court.

Meanwhile, for Fleischmann, the waiting game extends into yet another year as the whistleblower waits for a trial. The Justice Department of America, it transpires, is only interested in collecting as many fines as possible. Putting criminals in jail is not high on their list of priorities.

And to add more to this insult, the banks were bailed out by the tax payers. And you guessed it, Chase was one of them. They receive $25,000,000,000 from YOU!

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