Suspicious
Deaths of Bankers Are Now Classified as “Trade Secrets”
It
doesn’t get any more Orwellian than this...
By
Pam Martens and Russ Martens: April 28, 2014
(Left)
JPMorgan's European Headquarters at 25 Bank Street, London Where
Gabriel Magee Died on January 27 or January 28, 2014
28
April, 2014
It
doesn’t get any more Orwellian than this: Wall Street mega banks
crash the U.S. financial system in 2008. Hundreds of thousands of
financial industry workers lose their jobs. Then, beginning late last
year, a rash of suspicious deaths start to occur among current and
former bank employees. Next we learn that four of the Wall
Street mega banks likely hold over $680 billion face amount of life
insurance on their workers, payable to the banks, not the families.
We ask their Federal regulator for the details of this life insurance
under a Freedom of Information Act request and we’re told the
information constitutes “trade secrets.”
According
to the Centers for Disease Control and Prevention, the life
expectancy of a 25 year old male with
a Bachelor’s degree or higher as of 2006 was 81 years of age. But
in the past five months, five highly educated JPMorgan male employees
in their 30s and one former employee aged 28, have died under
suspicious circumstances, including three of whom allegedly leaped
off buildings – a statistical rarity even during the height of the
financial crisis in 2008.
There
is one other major obstacle to brushing away these deaths as random
occurrences – they are not happening at JPMorgan’s closest peer
bank – Citigroup. Both JPMorgan and Citigroup are global financial
institutions with both commercial banking and investment banking
operations. Their employee counts are similar – 260,000 employees
for JPMorgan versus 251,000 for Citigroup.
Both
JPMorgan and Citigroup also own massive amounts of bank-owned life
insurance (BOLI), a controversial practice that pays the corporation
when a current or former employee dies. (In the case of former
employees, the banks conduct regular “death sweeps” of public
records using former employees’ Social Security numbers to learn if
a former employee has died and then submits a request for payment of
the death benefit to the insurance company.)
Wall
Street On Parade carefully researched public death announcements over
the past 12 months which named the decedent as a current or former
employee of Citigroup or its commercial banking unit, Citibank. We
found no data suggesting Citigroup was experiencing the same rash of
deaths of young men in their 30s as JPMorgan Chase. Nor did we
discover any press reports of leaps from buildings among Citigroup’s
workers.
Given
the above set of facts, on March 21 of this year, we wrote to the
regulator of national banks, the Office of the Comptroller of the
Currency (OCC), seeking the following information under the Freedom
of Information Act (See OCC
Response to Wall Street On Parade’s Request for Banker Death
Information):
The
number of deaths from 2008 through March 21, 2014 on which JPMorgan
Chase collected death benefits; the total face amount of BOLI life
insurance in force at JPMorgan; the total number of former and
current employees of JPMorgan Chase who are insured under these
policies; any peer studies showing the same data comparing JPMorgan
Chase with Bank of America, Wells Fargo and Citigroup.
The
OCC responded politely by letter dated April 18, after first calling
a few days earlier to inform us that we would be getting nothing
under the sunshine law request. (On Wall Street, sunshine routinely
means dark curtain.) The OCC letter advised that documents relevant
to our request were being withheld on the basis that they are
“privileged or contains trade secrets, or commercial or financial
information, furnished in confidence, that relates to the business,
personal, or financial affairs of any person,” or relate to
“a record contained in or related to an examination.”
The
ironic reality is that the documents do not pertain to the personal
financial affairs of individuals who have a privacy right.
Individuals are not going to receive the proceeds of this life
insurance for the most part. In many cases, they do not even know
that multi-million dollar policies that pay upon their death have
been taken out by their employer or former employer. Equally
important, JPMorgan is a publicly traded company whose shareholders
have a right under securities laws to understand the quality of its
earnings – are those earnings coming from traditional banking and
investment banking operations or is this ghoulish practice of
profiting from the death of workers now a major contributor to
profits on Wall Street?
As
it turns out, one aspect of the information cavalierly denied to us
by the OCC is publicly available to those willing to hunt for it. On
March 24 of this year, we reported that JPMorgan Chase held $10.4
billion in BOLI assets at its insured depository bank as of December
31, 2013.
We
reached out to BOLI expert, Michael D. Myers, to understand what
JPMorgan’s $10.4 billion in BOLI assets at its commercial bank
might represent in terms of face amount of life insurance on its
workers. Myers said: “Without knowing the length of the investment
or its rate of return, it is difficult to estimate the face amount of
the insurance coverage. However, a cash value of $10.4 billion
could easily translate into more than $100 billion in actual
insurance coverage and possibly two or three times that amount”
said Myers, a partner in the Houston, Texas law firm McClanahan Myers
Espey, L.L.P.
Myers’
and his firm have represented the families of deceased employees for
almost two decades in cases involving corporate-owned life insurance
against employers such as Wal-Mart Stores, Inc., Fina Oil and
Chemical Co., and American Greetings Corp. (Families may be entitled
to the proceeds of these policies if employee consent was required
under State law and was never given and/or if the corporation cannot
show it had an “insurable interest” in the employee — a tough
test to meet if it’s a non key employee or if the employee has left
the firm.)
As
it turns out, the $10.4 billion significantly understates the amount
of money JPMorgan has tied up in seeking to profit from workers’
deaths. Since Wall Street banks are structured as holding companies,
we decided to see what type of financial information might be
available at the Federal Financial Institutions Examination Council
(FFIEC), a federal interagency that promotes uniform reporting
standards among banking regulators.
The
FFIEC’s web site provided access to the consolidated financial
statements of the bank holding companies of not just JPMorgan Chase
but all of the largest Wall Street banks. We conducted our own peer
review study with the information that was available.
Four
of Wall Street’s largest banks hold a total of $68.1 billion in
BOLI assets. Using Michael Myers’ approximate 10 to 1 ratio, that
would mean that over time, just these four banks could potentially
collect upwards of $681 billion in tax free income from life
insurance proceeds on their current and former workers. (Death
benefits are received tax free as is the buildup in cash value in the
policies.) The breakdown in BOLI assets is as follows as of December
31, 2013:
Bank
of America $22.7 billion
Wells
Fargo
18.7 billion
JPMorgan
Chase 17.9 billion
Citigroup
8.8
billion
In
addition to specifics on the BOLI assets, the consolidated financial
statements also showed what each bank was reporting as “Earnings
on/increase in value of cash surrender value of life insurance” as
of December 31, 2013. Those amounts are as follows:
Bank
of America $625 million
Wells
Fargo 566 million
JPMorgan
Chase 686 million
Citigroup
0
Given
the size of these numbers, there is another aspect to BOLI that
should raise alarm bells among both regulators and shareholders. The
Wall Street banks are using a process called “separate accounts”
for large amounts of their BOLI assets with reports of some funds
never actually leaving the bank and/or being invested in hedge funds,
suggesting lessons from the past have not been learned.
On
May 20, 2008, Bloomberg News reported that Wachovia Corp. (now owned
by Wells Fargo) and Fifth Third Bancorp reported major losses on
failed gambles with BOLI assets. “Wachovia reported a $315 million
first-quarter loss in its bank-owned life insurance program, known as
BOLI, because of investments in hedge funds managed by Citigroup Inc.
Fifth Third said in a lawsuit filed last month that it had losses of
$323 million from Citigroup’s Falcon funds, which slumped more than
50 percent in the past year as the subprime market collapsed.”
Citigroup’s Falcon Strategies hedge fund had lost as much as 75
percent of its value by May 2008.
Following
are the names and circumstances of the five young men in their 30s
employed by JPMorgan who experienced sudden deaths since December
along with the one former employee.
Joseph
M. Ambrosio, age
34, of Sayreville, New Jersey, passed away on December
7, 2013 at
Raritan Bay Medical Center, Perth Amboy, New Jersey. He was employed
as a Financial Analyst for J.P. Morgan Chase in Menlo Park. On March
18, 2014, Wall Street On Parade learned from an immediate member of
the family that Joseph M. Ambrosio died suddenly from Acute
Respiratory Syndrome.
Jason
Alan Salais, 34
years old, died December
15, 2013 outside
a Walgreens inPearland, Texas. A family member confirmed that the
cause of death was a heart attack. According to the LinkedIn profile
for Salais, he was engaged in Client Technology Service “L3 Operate
Support” and previously “FXO Operate L2 Support” at JPMorgan.
Prior to joining JPMorgan in 2008, Salais had worked as a Client
Software Technician at SunGard and a UNIX Systems Analyst at Logix
Communications.
Gabriel
Magee, 39, died
on the evening of January
27, 2014 or
the morning of January
28, 2014. Magee
was discovered at approximately 8:02 a.m. lying on a 9th level
rooftop at the Canary Wharf European headquarters of JPMorgan Chase
at 25 Bank Street, London. His specific
area of specialty at JPMorgan was “Technical architecture
oversight for planning, development, and operation of systems for
fixed income securities and interest rate derivatives.” A coroner’s
inquest to determine the cause of death is scheduled for May 20, 2014
in London.
Ryan
Crane, age
37, died February
3, 2014, at
his home in Stamford, Connecticut. The Chief Medical Examiner’s
office is still in the process of determining a cause of death. Crane
was an Executive Director involved in trading at JPMorgan’s New
York office. Crane’s death on February 3 was not reported by any
major media until February 13, ten days later, when Bloomberg News
ran a brief story.
Dennis
Li (Junjie), 33
years old, died February
18, 2014 as
a result of a purported fall from the 30-story Chater House office
building in Hong Kong where JPMorgan occupied the upper floors. Li is
reported to have been an accounting major who worked in the finance
department of the bank.
Kenneth
Bellando,
age 28, was found outside his East Side Manhattan apartment building
on March
12, 2014.
The building from which Bellando allegedly jumped was only six
stories – by no means ensuring that death would result. The young
Bellando had previously worked for JPMorgan Chase as an analyst and
was the brother of JPMorgan employee John Bellando, who was
referenced in the Senate Permanent Subcommittee on Investigations’
report on how JPMorgan had hid losses and lied to regulators in the
London Whale derivatives trading debacle that resulted in losses of
at least $6.2 billion.
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