| NEW YORK
NEW YORK Dec 18 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
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.