It's been five years since Bernard Madoff's massive multibillion-dollar Ponzi scheme was exposed, but JPMorgan Chase, which worked with Madoff, is only settling things now. Various sources report that the investment bank is working out an agreement with the U.S. Attorney's office that would allow it to "escape criminal charges" and pay a settlement around $2 billion.

According to the Wall Street Journal, "The deal, which would also include a deferred-prosecution agreement with U.S. Attorney Preet Bharara, could be wrapped up by the end of year, said others close to the case. Prosecutors have been looking for whether the bank failed to alert regulators despite numerous red flags. A central component of the case is why the bank didn't provide a formal report raising concerns about Mr. Madoff in the U.S. despite filing such a document with authorities in the U.K."

This settlement would require payment of over $1 billion, and the NY Times reports, "The rest of the fines would be imposed by Washington regulators investigating broader gaps in the bank’s money-laundering safeguards."

Until now, no big Wall Street bank has ever been subjected to such an agreement, which is typically deployed only when misconduct is severe. JPMorgan, the authorities suspect, continued to serve as Mr. Madoff’s primary bank even as questions mounted about his operation, with one bank executive acknowledging before the arrest that Mr. Madoff’s “Oz-like signals” were “too difficult to ignore,” according to a private lawsuit.

In fact, one JPMorgan employee—a risk officer—actually sent an email saying that another bank employee "just told me that there is a well-known cloud over the head of Madoff and that his returns are speculated to be part of a Ponzi scheme."