By Elizabeth Hearst
JPMorgan Chase, the largest bank in the United States, has launched an internal investigation into employees and customers who may have been implicated in the misuse of Covid-19 recovery funds as reported by the Wall Street Journal.
In an internal memo, the bank stated that it had discovered cases of customers “misusing Paycheck Protection Program loans, unemployment benefits and government programs”. The Paycheck Protection Program (PPP) was established by the US government to assist small businesses with payroll costs during lockdown protocols in the US.
The bank stated that “some employees had fallen short too” and added that “we are doing all we can to identify those instances and cooperate with law enforcement where appropriate”. The memo detailed that these issues were “conduct that does not live up to our business and ethical principles – and may even be illegal.”
In July, the Small Business Administration (SBA) that administered the PPP said that JPMorgan Chase was the largest lender to the program by loan value, estimated at 270,000 loans totalling nearly $30 Billion.
Following these reports, the stock value of JPMorgan Chase fell by 3.48%, with stocks estimated to be worth $99 per share. Stocks plunged at the bank in March as banks and companies scrambled to deal with the Covid-19 pandemic.
The SBA also warned that there were “strong indicators of widespread potential fraud” as a result of the economic disaster loan program and estimates that the program provided over $500 Billion in loans during the pandemic period.
Although many beneficiaries of the program have praised the package from preventing them from going under, widespread allegations of misconduct have begun to circulate. ABC news reports that there have been questions raised about some of the program’s benefactors including Kanye West’s fashion brand and the Church of Scientology.
According to the Associated Press, the House Select Subcommittee on the Coronavirus Crisis stated that they had uncovered discrepancies in the payment programme, including fraudulent activity and multiple loans to companies totalling over $1 Billion.
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