JPMorgan agreed to pay a record $13 billion following a probe of its mortgage operation, Washington Mutual bad loans, and mass waivers on misrepresented products.

Specifically, JPMorgan knowingly bundled toxic loans into packages sold to unsuspecting investors.

But all’s well that ends well.

JPMorgan was assessed a $13 billion fine but apparently did nothing wrong. As an added bonus, $7 billion of that $13 billion settlement is tax deductible.

Please consider JPMorgan $13 Billion Mortgage Deal Seen as Lawsuit Shield

JPMorgan Chase & Co. (JPM)’s record $13 billion deal to end probes into mortgage-bond sales may save the bank billions more because of what the agreement lacked: an explicit admission of wrongdoing.

Employees of JPMorgan and two firms it acquired knew some of the loans included in bonds didn’t meet underwriting standards, a fact not shared with buyers of those securities, the U.S. Justice Department said yesterday in a statement. That doesn’t mean the company misled investors, said Chief Financial Officer Marianne Lake, disputing how some state and federal officials characterized the deal.

No Admission

“We didn’t say that we acknowledge serious misrepresentation of the facts,” Lake said yesterday in a conference call with analysts. “We would characterize potentially the statement of facts differently than others might.”

JPMorgan acknowledged the statement of facts — the settlement’s official narrative of events leading up to the infractions — without admitting violations of law, Lake said. The bank also denied any violations in an accompanying slide show.

Separate agreements with the Federal Deposit Insurance Corp. and National Credit Union Administration, both disclosed yesterday, and an accord last month with the FHFA all contained explicit denials of wrongdoing by JPMorgan.

Attorney General Eric Holder said in a statement. “JPMorgan was not the only financial institution during this period to knowingly bundle toxic loans and sell them to unsuspecting investors, but that is no excuse for the firm’s behavior.”

U.S. Attorney Benjamin Wagner in Sacramento, California, said a criminal investigation of the bank’s conduct in the sales of residential mortgage-backed securities began less than a year ago, and while “active and ongoing,” isn’t far enough along to say whether anyone will face charges.

The six biggest U.S. banks, led by JPMorgan and Charlotte, North Carolina-based Bank of America Corp., have piled up more than $100 billion in legal costs since the financial crisis, a figure that exceeds all of the dividends paid to shareholders in the past five years, according to data compiled by Bloomberg.

Penalty for Doing Nothing Wrong

As compensation to homeowners for doing nothing wrong, JPMorgan will devote $4 billion to consumer relief for affected homeowners, including principal forgiveness, loan modifications and efforts to reduce blight.

Tax Deductions

JPMorgan’s $2 billion penalty (also for doing nothing wrong) isn’t tax deductible, but $7 billion in compensatory payments are, according to Chief Financial Officer Marianne Lake in the conference call.

Ongoing Investigations

Bloomberg notes “The firm is still the subject of Justice Department probes into its energy-trading business, recruiting practices in Asia and its relationship with Ponzi scheme operator Bernard Madoff.”

Expect those (nothing to see here, so please move along charges) to be swept under the rug as well, also with corresponding tax deductions, and of course “no admission of wrongdoing” by anyone.

Mike “Mish” Shedlock