JPMorgan Chase Paid Witness $9 Billion to Keep Her from Talking
Alayne Fleischmann is the central witness in one of the biggest cases of white-collar crime in American history, possessing secrets that JPMorgan Chase CEO Jamie Dimon late last year paid $9 billion to keep the public from hearing.
Back in 2006, as a deal manager at the gigantic bank, Fleischmann first witnessed, then tried to stop, what she describes as "massive criminal securities fraud" in the bank's mortgage operations. Because of a confidentiality agreement, she's kept her mouth shut since then. "My closest family and friends don't know what I've been living with," she says. "Even my brother will only find out for the first time when he sees this interview."
Six years after the crisis that cratered the global economy, it's not exactly news that the country's biggest banks stole on a grand scale. That's why the more important part of Fleischmann's story is in the pains Chase and the Justice Department took to silence her.
She was blocked at every turn: by asleep-on-the-job regulators like the Securities and Exchange Commission, by a court system that allowed Chase to use its billions to bury her evidence, and, finally, by officials like outgoing Attorney General Eric Holder, the chief architect of the crazily elaborate government policy of surrender, secrecy and cover-up. "Every time I had a chance to talk, something always got in the way," Fleischmann says.
This past year she watched as Holder's Justice Department struck a series of historic settlement deals with Chase, Citigroup and Bank of America. The root bargain in these deals was cash for secrecy. The banks paid big fines, without trials or even judges – only secret negotiations that typically ended with the public shown nothing but vague, quasi-official papers called "statements of facts," which were conveniently devoid of anything like actual facts.
And now, with Holder about to leave office and his Justice Department reportedly wrapping up its final settlements, the state is effectively putting the finishing touches on what will amount to a sweeping, industry-wide effort to bury the facts of a whole generation of Wall Street corruption.
November 10, 2014
Rolling Stone - Author and journalist Matt Taibbi has returned to writing for
Rolling Stone magazine with an article profiling JPMorgan Chase whistleblower Alayne Fleischmann. Taibbi is most acclaimed for his books,
Griftopia and more recently,
The Divide: American Injustice in the Age of the Wealth Gap. The ACLU of Illinois is pleased to be welcoming Mr. Taibbi as the guest speaker at the first annual
ACLU Lunch on April 17, 2015 in Chicago.
The Rolling Stone article reveals what Taibbi refers to as “one of
the biggest cases of white-collar crime in American history.” For years,
JPMorgan Chase was engaged in a massive scam reselling bad mortgages as
above-subprime securities. Taibbi writes about when Fleischmann first
became suspicious of the scam:
A few months into her tenure, Fleischmann would later
testify in a DOJ deposition, the bank hired a new manager for diligence,
the group in charge of reviewing and clearing loans. Fleischmann
quickly ran into a problem with this manager, technically one of her
superiors. She says he told her and other employees to stop sending him
e-mails. The department, it seemed, was wary of putting anything in
writing when it came to its mortgage deals.
“If you sent him an e-mail, he would actually come out and yell at
you,” she recalls. “The whole point of having a compliance and diligence
group is to have policies that are set out clearly in writing. So to
have exactly the opposite of that – that was very worrisome.” One former
high-ranking federal prosecutor said that if he were taking a criminal
case to trial, the information about this e-mail policy would be
crucial. “I would begin and end my opening statement with that,” he
says. “It shows these people knew what they were doing and were trying
not to get caught.”
Read the entire article.
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