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JPMorgan Chase nears a $2 billion deal in a case tied to Madoff

Working through a long list of legal problems, JPMorgan Chase is starting the new year with another steep payout to the government.

The bank plans to reach as soon as this week roughly $2 billion in criminal and civil settlements with federal authorities who suspect that it ignored signs of Bernard L. Madoff's Ponzi scheme, according to people briefed on the case.

(Read more: Feds probe JPMorgan interference in Madoff case)

All told, after reaching the Madoff settlements with federal prosecutors in Manhattan and regulators in Washington, the bank will have paid some $20 billion to resolve government investigations over the last 12 months

JPMorgan's Madoff settlements, the people briefed on the case said, would also involve a so-called deferred prosecution agreement, a criminal action that would essentially suspend an indictment as long as JPMorgan acknowledged the facts of the government's case and changed its behavior. The agreement, nearly unheard-of for a giant American bank and typically employed only when misconduct is extreme, underscores the magnitude of the case against JPMorgan.

Adam Jeffery | CNBC

The bank's settlement talks with the authorities, reported by The New York Times last month, thrust JPMorgan into the spotlight on the fifth anniversary of Mr. Madoff's arrest.

Under the terms of the deals, the bank will pay more than $1 billion to the prosecutors in Manhattan and the remainder to the Office of the Comptroller of the Currency and a unit of the Treasury Department investigating broader breakdowns in the bank's safeguards against money-laundering. The government plans to earmark some of the payout for Mr. Madoff's victims, according to the people briefed on the case, who spoke on condition they not be named because they were not authorized to discuss private settlement talks.

(Read more: From prison, Madoff is still trying to control the story)

JPMorgan at one point discussed a so-called tolling agreement with prosecutors that would essentially extend the five-year legal deadline for bringing a case, one person said. The deadline might have otherwise expired late last year.

JPMorgan declined to comment for this article, but has publicly maintained that "all personnel acted in good faith" in the Madoff matter.

A spokesman for the United States attorney's office in Manhattan, and the FBI, which led the investigation into JPMorgan, declined to comment. A spokesman for the comptroller's office also declined to comment.


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