In the second in a series in American Banker on JPMorgan Chase's delinquent credit card collections operation which ground to a halt in a spectacular fashion in 2009, reporter Jeff Horwitz details what the bank is learning to its horror -- you don't mess with Linda Almonte.
Linda, described as a "midlevel Chase executive," was unceremoniously escorted out the door by the bank's credit card litigation support group in San Antonio late that year for challenging her superiors as to the integrity of a $250,000,000 portfolio of card debt they were preparing to sell to debt buyers.
In appreciation of that treatment -- and for Chase essentially destroying her banking career -- Linda Almonte responded with a wrongful termination case. The bank then hired big-gun Houston firm Baker Botts to represent them and the case was settled.
But not for Almonte
Aware that Chase's practices had not changed, in 2009-2010 she took the matter to the FTC, Congressional Oversight Committee and Senate Banking Committee. No luck here, as no one seemed to want to deal with another big bank scandal -- much less a TBTF (Too Big To Fail) firm which had extracted billions of taxpayer dollars to stay in business.
When Chase, in response, caused the case to be moved to federal court, Almonte's plight caught the attention of the local and national press. The New York Times ran a prominent article in its business section highlighting her and her allegations and coined Almonte's phrase "robosigning."
(Coincidentally, some $45.9 billion in consumer lawsuits were dropped and Chase acknowledges that Almonte's case has had a significant impact on their credit card division's bottom line.)
Linda took her treasure trove of files with her to national press and began working with Scott Pelley, CBS and 60 Minutes to patiently educate producers and reporters on how to research her allegations and build an incontrovertible case.
Once the SEC Whistleblower Program was up and running in August, 2011, Linda set about to establish an SEC Whistleblower claim -- which then caused her supporting documents to become public information. She also complained to the OCC (Office of the Comptroller of the Currency) which dispatched enforcement staffers to the San Antonio bank offices for two months. They have since left, and the investigation is described as "ongoing."
Alert reporters begin digging... the best work to date being done by American Banker's Jeff Horwitz... and national television broadcasts are in the works.
The bottom line expense for JPMorgan Chase... one which is constantly and unhappily expanding...is that it has had to - as Horwitz put it -- "mothball" a legal operation that had been producing several billion dollars in legal judgments a year and more than $1.2 billion in recoveries.
And, what stoked this eruption? By punishing one of its own for actually doing her job -- which as a six sigma black belt in quality control meant protecting the bank from crossing any legal lines -- they set into motion the legal and ethical foundations for the case which she has prepared.
More than that, it stoked fire and anger. When Linda was put out on the street, it was along with her husband and four children. They moved from a comfortable apartment to cheap motels. The children were pulled from school and hauled to Florida where expenses were manageable. And she was out of work for over a year.
JPMorgan Chase may have made this lady unemployable, but Jamie Dimon may personally be contemplating this possibility when the ashes of Mt. St. Almonte settle and the final wheels of justice grind to a halt.
You just don't mess with Linda Almonte.