JP Morgan CEO Jamie Dimon REUTERS/ Larry Downing U.S. Attorney Preet Bharara just held a press conference about the $1.7 billion fine JP Morgan must pay for its negligence in allowing Bernie Madoff to launder his ill gotten gains through the bank for decades.

"For years JP Morgan repeatedly ignored warning signs & allowed suspicious round-trip transactions through Madoff’s account," said Bharara.

But that's not all.

What is clear from Bharara's description of the bank's relationship with Madoff, is that JP Morgan was aware of the Ponzi scheme before Madoff's arrest.

In 2007 and 2008 it became increasingly clear to JP Morgan's top brass that something was awry.

Instead of alerting U.S. authorities, however, the bank made sure that none of its money was in jeopardy first.

The bank itself was invested with Madoff through a number of feeder funds. According to Bharara, in the fall of 2008, a JP Morgan memo laid out what was wrong with Madoff. It questioned his "odd choice of a one man accounting firm, " and said that there were "various elements of this story that" made the bank "nervous."

Two weeks later, the bank sent a memo to UK regulators saying that Madoff's returns were suspicious.

That was around October/November 2008, and as that was going on, JP Morgan also took $275 million of its money out of Madoff feeder funds.

He was arrested on December 11, 2008.

"JPMC connected the dots when it mattered to its own profit," said Bharara, "but wasn’t so diligent..." when it came to its obligations to report illegal activity.

In case you missed the full ruling, aside from admitting guilt and paying a $1.7 billion fine, JP Morgan has a two year deferred prosecution. That means it has to cooperate with the DOJ for two years and "reform its anti-money laundering policies."

Executives that knew about Madoff, for the record, will not be prosecuted as individuals. That's part of the deal.