Rubio questions JPMorgan's Dimon over alleged coronavirus aid fraud at bank
Rubio asked for details of the company's investigation by Sept. 23
Sen. Marco Rubio on Thursday questioned JPMorgan Chase CEO Jamie Dimon after the nation's largest bank said some of its employees may have played a role in potential abuse of coronavirus relief programs intended to help small businesses weather the pandemic.
"I am alarmed by recent reports alleging that employees of your financial intuition may have been involved in potentially illegal conduct in the distribution of PPP," Rubio wrote in the letter.
Rubio asked for details of the company's investigation by Sept. 23, as well as other steps the New York-based bank has taken to mitigate potential fraud and alert authorities to instances of misuse.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| JPM | JPMORGAN CHASE & CO. | 245.33 | +3.39 | +1.40% |
"Financial institutions, like yours, are on the frontlines of providing PPP assistance. Allegations that employees of financial institutions have exploited either the PPP or EIDL programs for their own gain must be investigated fully," the Florida Republican, who heads the Senate Small Business panel, wrote.
Rubio's letter came after JPMorgan sent an internal memo to employees on Tuesday saying it has seen "instances of customers misusing Paycheck Protection Program Loans, unemployment benefits and other government programs," noting that "some employees have fallen short, too."
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"Unfortunately, we’ve also seen conduct that does not live up to our business and ethical principles — and may even be illegal," the memo, a copy of which was obtained by FOX Business, said.
It's unclear how many employees may have misused the program, or whether JPMorgan has already taken disciplinary action against the employees. Rubio requested the bank provide "specific allegations" that are being investigated.
JPMorgan urged employees to report concerns to their managers or through a separate hotline if they see improper conduct.
An internal investigation by JPMorgan, prompted in June by an inquiry from the federal government, found that a number of bank employees improperly applied for and received loans from the Small Business Association's Economic Injury Disaster Loan program, a person familiar with the matter told FOX Business. Under the program, which was handled directly by the Small Business Administration, businesses could receive forgivable loans of up to $10,000. But through the probe, JPMorgan determined that some employees had applied for EIDL loans and pocketed the money.
The government agency asked banks to investigate any accounts that had received deposits through the EIDL program and look for signs of fraud. JPMorgan found a number of suspicious deposits — and in the course of freezing them, realized that some accounts belonged to employees. A spokesperson for JPMorgan declined to comment.
At the end of March, Congress approved a massive $2.2 trillion stimulus package, which established the Paycheck Protection Program, a rescue fund designed to help keep small businesses afloat and avert mass layoffs during the pandemic.
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JPMorgan was the nation's largest participant in the $670 billion program, approving more than 280,000 loans worth more than $32 billion, according to the Small Business Administration. Through the program, businesses with fewer than 500 employees could apply for loans of as much as $10 million each; so long as 60% of that money went toward maintaining payroll, the federal government will forgive it.
The program's rollout was met with criticism as multimillion-dollar loans went to large, public companies -- even as small businesses languished.
In mid-April, a group of small business owners filed lawsuits against some of the nation's biggest banks -- including JPMorgan -- accusing them of reshuffling applications to frontload businesses seeking higher loans, thereby boosting their own profits.