A former JP Morgan private banker is fighting an FBI allegation that he embezzled $1.6 million from client accounts, most of which he spent trading stocks.
Former business relationship manager and private client banker Kevin Chiu, who worked at two JP Morgan offices in Brooklyn, was acquitted Wednesday of fraud, embezzlement, money laundering and identity theft charges in federal court in New York. claimed. according to the criminal complaintFrom October 2020 to June 2022, Qiu stole from a customer’s account and then tried to hide the traces by transferring money to other accounts he managed. It is said that
The FBI claims he transferred most of the embezzled funds to a brokerage account his mother held at another institution, but the court documents did not name the account. The lawsuit alleges that he used the account to buy shares of the electric car maker Tesla and other stocks, eventually losing most of his investment.
According to the FBI, Mr. Chiu admitted to wrongdoing in an interview with JP Morgan officials on July 6, 2022. The bank fired him eight days later and compensated affected customers, according to the complaint.
A JPMorgan spokeswoman declined to comment. Attempts to contact a lawyer on behalf of Qiu, who is listed in court records, failed.
Unlike typical bankers, JP Morgan’s Private Bank employees provide everything from financial planning and investments to philanthropy and family office management. Private banks typically target high net worth or ultra high net worth individuals and often require their clients to have a minimum of $1 million in investable assets.
JP Morgan’s Private Bank Plan call for doubling the number of advisors by Add 1,500 planners by 2026. The bank has approximately $2.1 trillion in assets under management.
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Chiu’s cheating allegations came to light in July 2022 when a client, a 74-year-old woman, walked into one of her Brooklyn offices and submitted questionable documents to her manager. According to the criminal complaint, her client, who maintains residences in both Brooklyn and Israel, wants to come to Chiu’s office to discuss it in person, so she made a statement at her home in Israel. He explained that he had asked him not to send the letter.
The customer said the bank had sent her a statement in Israel anyway, which showed only $13,000 in her account. A separate statement filed by Ms. Chiu listed the amount at $900,000, according to her complaint.
Sam Edwards, a securities attorney at Houston-based Shepherd Smith, Edwards & Qantas and former president of the Public Investor Advocacy Lawyers Association, said the fraud allegations were simple. He said it was a little surprising. In this case, he said it was a good thing that JP Morgan made a “mistake” of sending the client’s statement to his home in Israel. Otherwise, Chiu’s allegations of wrongdoing would never have been exposed.
“Thankfully she took it to the bank,” Edwards said. “Because in my experience, when something like this happens and there is evidence of wrongdoing, the fundamental question is, ‘Why didn’t you realize it was wrong?
According to the complaint, JP Morgan launched an internal investigation and found that Mr. Chiu was transferring client funds to a brokerage account in his mother’s name. According to the complaint, inspectors later claimed that Chiu made similar transfers from five other customer accounts to cover up embezzlement or traces of embezzlement.
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Chiu is also suspected of taking some of the money he had kept in a brokerage account and eventually transferring it to his mother’s other bank account. He then used electronic payment service Zelle to transfer money to his account, according to the complaint. The FBI claims he also sent some of the money to his girlfriend.
Overall, Chiu is accused of withdrawing $2.4 million from customer accounts to cover losses of $1.6 million. The lawsuit alleges that he persuaded a 74-year-old customer to fill out a blank transaction form and committed fraud. He also used the bank accounts and routing numbers of at least three customers to complete some of the money transfers, the complaint said.
According to the BrokerCheck database Chiu, who is maintained by the Financial Industry Regulatory Authority, a broker-dealer self-regulatory body, joined JPMorgan Securities in July 2017, but FINRA barred him from the industry in February.