JPMorgan Chase to pay steep price for not reporting Madoff fraud suspicions: $2.5 billion

FILE - In this May 11, 2012, file photo, people stand in the lobby of JPMorgan Chase headquarters in New York. JPMorgan Chase & Co., already beset by other costly legal woes, has agreed to pay $1.7 billion to settle criminal charges accusing the bank of ignoring obvious warning signs of Bernard Madoff's massive Ponzi scheme, federal authorities said Tuesday, Jan. 7, 2014. (AP Photo/Mark Lennihan, File) (The Associated Press)

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Preet Bharara, U.S. Attorney for the Southern District of New York, announces a settlement with JPMorgan Chase, Tuesday, Jan. 7, 2014 in New York. JPMorgan Chase & Co., already beset by other costly legal woes, has agreed to pay $1.7 billion to settle criminal charges that it ignored obvious warning signs of Bernard Madoff's massive Ponzi scheme, Bharara said Tuesday. (AP Photo/Mark Lennihan) (The Associated Press)

NEW YORK – A New York prosecutor says JPMorgan Chase & Co. looked out for itself when it suspected something was wrong with Bernard Madoff's accounts but otherwise ignored alarm bells.

U.S. Attorney Preet Bharara commented Tuesday as he revealed a deal with JPMorgan. He says the nation's largest bank will forfeit $1.7 billion to settle a criminal case for failing to blow the whistle on the fraud that cheated investors of nearly $20 billion.

The bank will pay more than $2.5 billion when a $350 million Treasury Department penalty and nearly $550 million to settle lawsuits by investors is added.

The prosecutor says JPMorgan withdrew about $300 million from its own Madoff accounts but failed to notify U.S. regulators of its suspicions. The bank says it will do better in the future.