By Mcenery
Jamie Dimon capped off the long Labor Day weekend by warning employees who participated in illegal coronavirus loans that he’s on to them.
“We are so grateful for what you all are doing every day to keep our firm and the communities we serve strong,” read Tuesday morning’s missive to JPMorgan Chase’s 256,710 employees.
“Unfortunately, we’ve also seen conduct that does not live up to our business and ethical principles — and may even be illegal.”
The memo, signed by Dimon and twelve other top executives, said JPMorgan has been working with federal authorities to identify which of its customers have misused a piece of the $510 billion in federal funding intended to help small businesses survive the coronavirus pandemic.
The memo didn’t delve into specific instances, but the feds have been cracking down on abuse of the Paycheck Protection Program for months.
In July, federal prosecutors charged a Florida man with using $4 million in PPP funds to buy a Lamborghini instead of paying his employees. Earlier this month, another Florida man was charged with using $700,000 of his $2 million loan to buy a 40-foot boat. And in August, a wannabe tycoon from Texas was busted for allegedly using his $1.6 million in federal loans on a Lamborghini, a pickup truck, a Rolex watch and visits to Houston strip clubs.
JPMorgan doled out $28 billion in PPP funding — the largest by any bank that participated in the program. It has also come under scrutiny for helping large public companies grab millions in funding intended for mom-and-pop shops, including national restaurant chains Shake Shack and Ruth’s Chris Steakhouse, which subsequently vowed to return the funds.
In addition to PPP fraud, JPMorgan is also on the lookout for abuse of “unemployment benefits and other government programs” distributed as part of the $2.2 trillion federal relief package intended to help the most vulnerable survive the pandemic.
“Some employees have fallen short, too,” the memo said. “We are doing all we can to identify those instances, and cooperate with law enforcement where appropriate.”
Industry sources say the memo suggests Dimon — who was bedridden during the first few months of the pandemic due to emergency heart surgery he had in March — is eager to not let misuse of PPP funds become a scandal for the bank. Dimon headed JPMorgan during the Great Recession when the banking industry was pilloried for accepting government bailouts for a crisis it helped create.
“PPP was a disaster from the get-go and almost no one was on top of where this money was going,” said one Wall Street insider. “Jamie wasn’t around when it happened, but he’s been around for everything else and he’s getting in front of this one.”
A JPMorgan spokesperson declined to detail what instances of abuse it has uncovered. “We distributed the note to reiterate our high standards,” she said.
