JPMorgan Chase & Co. agreed to pay $1.7 billion to resolve U.S. claims that it played a role in facilitating Bernard Madoff's Ponzi scheme, the government said, resolving yet another legal obstacle facing the bank.

The biggest bank in the U.S. by assets entered into a deferred-prosecution agreement with the office of Preet Bharara, the U.S. attorney in Manhattan, and acknowledged lapses in oversight related to an account Madoff used to fund his multibillion-dollar fraud.

Wall Street firms have spent years fighting claims by Madoff's victims that the companies ignored wrongdoing to continue reaping fees. Madoff, 75, maintained accounts with JPMorgan for more than 20 years before confessing to running a fraud that cost investors about $17 billion. He's serving a 150- year federal prison sentence in North Carolina.

JPMorgan agreed to the filing of a two-count criminal information in Manhattan federal court. As part of the deferred prosecution agreement, the bank agreed to fully cooperate with the U.S. government in its investigation for a period of two years from execution of the accord.

No individuals were charged as part of the agreement.

The New York-based bank is charged with failure to maintain an effective money-laundering program and failure to file a suspicious activity report, according to a copy of a letter dated yesterday to the bank's lawyers provided by Bharara's office.

Under the agreement, JPMorgan admitted to a statement of facts and to pay the $1.7 billion to the government, which said it plans to distribute the funds to victims of Madoff's fraud, the largest Ponzi scheme in U.S. history.

JPMorgan, led by Chief Executive Officer Jamie Dimon, agreed in 2013 to pay $15.7 billion to resolve other U.S. regulatory probes into practices including mortgage-bond sales and energy trading.

In recent years, deferred-prosecution agreements have become a popular tool for the Justice Department to resolve criminal investigations against large banks. HSBC Holdings Plc entered into a $1.9 billion deferred-prosecution agreement in December 2012 to resolve allegations of money laundering and violations of U.S. sanctions on Iran.

From 2000 to 2005, the Justice Department entered into a total of 35 corporate deferred-prosecution and non-prosecution agreements, according to data compiled by Gibson Dunn & Crutcher LLP. Since 2006, the department has struck 222 such deals, according to the law firm.

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