JPMorgan CEO Jamie Dimon. (Photo : Getty Images)
JPMorgan and its Hong Kong affiliate is going to pay $264 million in fines because the company hired relatives of Chinese government officials in exchange for approval of deals.
William F. Sweeney Jr., assistant director in charge of the FBI's New York Field Office, said in a statement, "Creating a barter system in which jobs are awarded to applicants in exchange for lucrative business deals is a corrupt scheme in and of itself."
He added, "But when foreign officials are among those involved in the bribe, the international free market system, and our national security are among the major threats we face."
Since 2006, the financial institution employed a strategy called "sons and daughters" where they agreed to hire referrals and relatives of Chinese government officials.
"The so-called Sons and Daughters program was nothing more than bribery by another name," said Assistant U.S. Attorney General Leslie Caldwell.
She added, "it's corruption, plain and simple."
The referral would then be reviewed by the New York office and would be hired even if the individual was unqualified or the company would have "no expected benefit from the hire."
Mike Koehler, a professor at Southern Illinois University School of Law, said that the U.S. government is now getting more involved than in the past.
"This enforcement action really reeks of a double standard. It's a well known fact that here in the United States, the friends and relatives of U.S. officials are sometimes hired into internships and job opportunities where they may not be the most qualified individual, where they may not have followed the normal hiring process," he said.
The Federal Reserve will also look into similar acts being done by big banks in Asia such as Citibank, Goldman Sachs, Deutsche Bank and UBS.
