The Covid-19 pandemic truly upended the normal functioning of the global economy. Many governments around the world responded to the economic crisis by providing relief programs and direct deposits to their citizens. Similarly, others offered relief from evictions or a moratorium on interest payments. However, Bloomberg’s latest report unravels what could be major scandal at JP Morgan Chase. The report delves into how a few JP Morgan Chase employees pocketed the Covid-19 relief funds. These funds were meant to provide relief to businesses affected by the pandemic. A JP Morgan Chase spokeswoman refused to comment after the media questioned her about this unfolding scandal.
Covid-19 Relief Funds
The report details how a few employees pocketed Covid-19 relief funds from the Economic Injury Disaster Loan (EIDL) Program.
The bank discovered the actions, all of which were tied to the Economic Injury Disaster Loan program, after noticing that suspicious amounts of money had been deposited into checking accounts owned by bank employees.
After JP Morgan Chase discovered what happened, it sent out a memo to all of its employees. The bank found out that individuals had received money meant for small businesses. As per Chase, they’ve fired the employees who improperly pocketed the money.
The nation’s largest bank sent a memo to roughly 256,000 employees Tuesday in which senior leaders said they were probing whether any staffers helped people misuse aid programs including “Paycheck Protection Program Loans, unemployment benefits and other government programs.” The firm had said it identified conduct by customers that didn’t meet its principles and “may even be illegal” and that some employees had fallen short on ethical standards, too.
In the meanwhile, the SBA (Small Business Administration) is already probing what’s going on.
The agency’s inspector general has since flagged evidence of fraud in the program, saying it identified more than $250 million in aid given to potentially ineligible recipients as well as $45.6 million in possibly duplicate payments. A Bloomberg Businessweek analysis of SBA data last month identified $1.3 billion in suspicious payments.
The Pundit’s Mantra
I won’t be surprised if regulatory agencies take a much broader look at what’s happening at other banks who also administered these loan programs. For instance, the SBA has already signaled its intent to investigate further how funds in these programs were disbursed.
In conclusion, these revelations could only further ignite public anger during a time of economic crisis. During the initial stages, many genuine businesses had a tough time getting access to much needed funds. Therefore, these revelations will only throw up more questions about how these programs were administered.
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