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JP Morgan Chase Paid $9 Billion to Keep This Woman Silent About Its Crimes

November 7, 2014 in Blogs

By Zaid Jilani, AlterNet

Whistleblower Alayne Fleischman has told all to journalist Matt Taibbi.


Over at Rolling Stone, Matt Taibbi has a blockbuster story about a thirty-something securities lawyer who Wall Street giant JP Morgan Chase paid $9 billion to keep silent.

Alayne Fleischmann witnessed criminal securities fraud while working as a deal manager at the bank. Part of her job was to review loans that the bank was taking over, and she began to see more and more cases where the bank was taking on loans where the individuals involved obviously could not pay.

One example: she reviewed a loan to a manicurist who claimed to have a $117,000 annual income; she calculated that she'd have to work 488 days a year to make that much money. Fleischmann and her co-workers flagged many of these loans as “stated income unreasonable for profession”; in one case in 2006, managers marked 33 percent loans in a loan sample under this category, but were effectively overturned by a Chase executive who forced them to drop the rate to less than 10 percent. Yet the bank continued to “sell…high-risk loans as low-risk securities,” despite the fact that doing so would be fraud.

Fleischmann continued to make similar complaints to her managers until she was laid off in 2008. She was under a confidentiality agreement with Chase, but she did have the ability to report crimes. So she put her trust in the federal government, which was tasked with overseeing and punishing the sort of fraud she witnessed.

But time and time again, the investigators demurred when presented with evidence of Chase's major crimes, instead choosing to focus on smaller ones. In 2012 and 2013, she worked with the U.S. Attorney's office in the Eastern District of California to again lay out the case for the crimes Chase had committed. In the fall of 2013, Attorney General Eric Holder had scheduled a press conference to announce fraud charges against Chase; Fleischmann felt vindicated at last. Yet curiously, the pres conference was cancelled, and reportedly the bank's chief, Jamie Dimon, had called Associate Attorney General Tony West and offered instead …read more

Source: ALTERNET

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