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Criminal action expected for JPMorgan in Madoff case: NYT

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(Globalpost/GlobalPost)

(Reuters) - JPMorgan Chase & Co <JPM.N> and federal authorities are nearing settlements over the bank's relationship with convicted Ponzi schemer Bernard Madoff, striking tentative deals that would involve about $2 billion in penalties and a rare criminal action, the New York Times reported.

The settlements would fault the bank for turning a blind eye to Madoff's huge Ponzi scheme, the Times said, citing people briefed on the case. (http://r.reuters.com/kef45v)

JPMorgan spokesman Joseph Evangelisti declined to comment on the New York Times report when contacted by Reuters.

Madoff was convicted in 2009 of defrauding thousands of investors and is serving a 150-year prison sentence. JPMorgan has been accused of ignoring warning signs that Madoff's business was a fraud, often to win more fees and commissions for services they provided.

The New York Times said the settlement with federal prosecutors in Manhattan would include a so-called deferred-prosecution agreement and more than $1 billion in penalties to resolve the criminal case.

The rest of the fines would be imposed by Washington regulators investigating broader gaps in the bank's money-laundering safeguards, the paper said.

JPMorgan, the biggest U.S. bank by assets, recently reached a $13 billion settlement of a range of government claims over bad mortgage securities and struck another deal with regulators to pay about $1 billion for its "London Whale" derivatives trading debacle.

(Reporting by Chris Peters in Bangalore; Editing by Supriya Kurane)

http://www.globalpost.com/dispatch/news/thomson-reuters/131212/criminal-action-expected-jpmorgan-madoff-case-nyt