JPMorgan says some employees have ‘fallen short’ as bank probes abuses of government relief funds
Jamie Dimon, chairman and chief executive officer of JPMorgan Chase & Co., listens during a Business Roundtable CEO Innovation Summit discussion in Washington, D.C., Dec. 6, 2018.
Andrew Harrer | Bloomberg | Getty Images
JPMorgan Chase welcomed employees back from a long holiday weekend with a troubling message in their inboxes: Some of them may have been involved in potentially illegal activity.
The bank’s operating committee, led by CEO Jamie Dimon, sent an email Tuesday morning to 256,710 employees saying that while the pandemic has brought out the best in many workers, there have been instances where customers abused the government’s coronavirus relief programs.
“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. “This includes instances of customers misusing Paycheck Protection Program loans, unemployment benefits and other government programs. Some employees have fallen short, too.”
The government’s mammoth $2.2 trillion coronavirus relief package included the Paycheck Protection Program for small businesses, enhanced unemployment benefits for individuals and support for larger companies. Fraud experts had expected that a program of that size would result in some element of abuse, and cases have emerged where criminals used PPP funds to purchase Lamborghinis and other luxury items.
But PPP had been designed by the Treasury Department as essentially an honor system that put most of the onus on the applicants, who had to certify on the need for these loans, and not the banks or its employees. JPMorgan spokeswoman Trish Wexler declined to comment on exactly how bank employees had fallen short in their duties.
“We are doing all we can to identify those instances, and cooperate with law enforcement where appropriate,” the bank said. “We want you to know because we need everyone to be vigilant.”
Lawmakers have been at an impasse over extending several key elements of the pandemic relief program, and new revelations of abuse may not help in those negotiations. JPMorgan, the biggest U.S. lender by assets, was the biggest issuer of PPP loans, doling out more than $29 billion in the program. Bloomberg reported on the memo earlier.
With reporting from CNBC’s Jim Forkin