JPMorgan Chase has fired several employees for allegedly pocketing funds from a federal program designed to aid companies hurt by the coronavirus shutdown, according to a person familiar with the matter.
An internal investigation by the nation’s biggest bank, prompted by a government inquiry, found that a number of JPMorgan employees improperly applied for and received money from the Small Business Association’s Economic Injury Disaster Loan program.
The EIDL program offered grants of up to $10,000 for businesses impacted by the coronavirus. But JPMorgan’s probe found that some bank employees got loans from the program and deposited the money into their personal accounts.
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A spokesperson for JPMorgan Chase declined to comment. The company has not said how many employees have been terminated in connection to the alleged misuse of coronavirus relief funds.
The discovery of possible fraud at JPMorgan prompted a surprising all-staff memo on Tuesday in which the company admitted finding evidence suggesting that some employees may have broken the law. The memo, which was signed by JPMorgan CEO Jamie Dimon and other senior executives, also implored employees to report any suspicious conduct.
“While we know that we are working through a period of unprecedented turmoil, it is precisely during difficult times like these that it is most important to continue to hold ourselves to the highest standards of conduct,” the memo said.
JPMorgan’s investigation was prompted by federal regulators. The company and other banks were recently contacted by the SBA, which said it had evidence of widespread fraud in the EIDL program, according to a person familiar with the matter.
The government agency asked banks to examine any accounts that had received deposits from the program and look for signs of fraud. JPMorgan found a number of suspicious deposits, including some involving accounts belonging to bank employees.