JPMorgan probing employees’ role in misuse of COVID relief funds

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JPMorgan Chase says it has identified instances in which COVID-relief funds were misused by customers and is probing employees’ involvement in the potentially illegal activities.

The New York-based bank said the conduct includes “instances of customers misusing Paycheck Protection Program Loans, unemployment benefits and other government programs” and that some “employees have fallen short, too,” according to a memo to staff from the bank’s senior leaders Tuesday. The firm said the incidents don’t meet its principles “and may even be illegal.”

“We are doing all we can to identify those instances and cooperating with law enforcement where appropriate,” according to the memo. The bank asked workers to report any conduct that violates its policies.

JPMorgan spokeswoman Trish Wexler declined to comment.

The Small Business Administration’s paycheck program was the centerpiece of the $2.2 trillion coronavirus relief package enacted in March and allowed small businesses to apply for a loans of as much as $10 million each. JPMorgan, the biggest U.S. bank, issued about 280,000 loans totaling more than $29 billion, making it the top PPP lender in the country, according to SBA data.

The U.S. Department of Justice has been pursuing cases of potential fraud in the emergency program. A congressional subcommittee found earlier this month that more than $1 billion in federal coronavirus relief went to U.S. small businesses that received multiple loans, according to a report that also raised red flags for potential fraud with thousands of other companies.

Bloomberg News
Coronavirus JPMorgan Chase Crime and misconduct Fraud Paycheck Protection Program