No prison for former JPMorgan exec in muni bond bid-rigging case
NEW YORK Dec 18 (Reuters) - A former JPMorgan Chase & Co vice president received no prison time on Wednesday after pleading guilty and cooperating with authorities investigating bid rigging and fraud schemes related to investment contracts for municipal bond proceeds.
James Hertz, 56, pleaded guilty to wire fraud and conspiracy charges in 2010 and cooperated in a wide-ranging investigation of the $3.7 trillion U.S. municipal bond market. The probe resulted in numerous convictions and got five large financial institutions to pay about $743 million in restitution, disgorgement and penalties.
In sentencing him to no prison time and no probation, U.S. District Judge Kimba Wood in New York noted Hertz's cooperation with the government and his "unblemished" character aside from the crime in question.
Prosecutors say that from 2001 to 2006, Hertz and others engaged in bid-rigging, determining in advance whose employer or institution would win contracts for investment and other municipal finance activities.
Court documents said that from 1998 to 2006, Hertz also received details about competitors' bids from a Minnesota broker in violation of U.S. Treasury Department regulations.
Hertz was the eighth of 13 people to plead guilty as part of the investigation and the first from JPMorgan, which agreed in 2011 to pay $228 million to settle federal and state bid-rigging investigations.
Another JPMorgan employee, Alexander Wright, pleaded guilty in 2012 to one count of conspiracy to commit wire fraud. He was sentenced in October to one year probation.
As part of his cooperation deal, Hertz testified the trial of three former UBS AG bankers: Peter Ghavami, Gary Heinz and Michael Welty. They were convicted on conspiracy and fraud charges stemming from the bid-rigging probe.
The ex-UBS bankers were sentenced in July to prison terms ranging from 16 to 27 months.
In total, 16 people have been convicted as part of the bid-rigging investigation. Phillip Murphy, a former executive at Bank of America Corp, is to face trial in February in Charlotte, North Carolina, on charges stemming from the probe.
The Justice Department obtained three other convictions in 2012 of three former bankers at General Electric Co's GE Capital unit: Steven Goldberg, Dominick Carollo and Peter Grimm. But a federal appeals court vacated their convictions, saying the government waited too long to prosecute. They were released from prison on Nov. 27.
The case is U.S. v. Hertz, U.S. District Court, Southern District of New York, No. 10-cr-01178.
- Hong Kong protesters march after fruitless talks with government
- Special Report: Traffickers use abductions, prison ships to feed Asian slave trade
- NOAA employee charged with stealing U.S. dam information
- Sweden gets two new sightings, as hunt for undersea intruder goes on
- U.S. to funnel travelers from Ebola-hit region through five airports