In the most damning evidence thus far of malfeasance at MF Global, Bloomberg reports that former New Jersey Senator and Governor Jon Corzine, while CEO of the company, personally ordered $200 million in investor funds transferred to cover an overdrawn account at JPMorgan Chase. Bloomberg has the goods in the form of a memo from one of MF Global’s treasurers:

Edith O’Brien, a treasurer for the firm, said in an e-mail quoted in the memo that the transfer was “Per JC’s direct instructions,” according to a copy of the memo obtained by Bloomberg News. The e-mail, dated Oct. 28, was sent three days before the company collapsed, the memo says. The memo does not indicate whether that phrase was the full text of the e-mail or an excerpt.

O’Brien’s internal e-mail was sent as the New York-based broker found intraday credit lines limited by JPMorgan, the firm’s clearing bank as well as one of its custodian banks for segregated customer funds, according to the memo, which was prepared for a March 28 House Financial Services subcommittee hearing on the firm’s collapse. O’Brien is scheduled to testify at the hearing after being subpoenaed this week.

“Over the course of that week, MF Global (MFGLQ)’s financial position deteriorated, but the firm represented to its regulators and self-regulatory organizations that its customers’ segregated funds were safe,” said the memo, written by Financial Services Committee staff and sent to lawmakers.

The real damaging piece is that JPMorgan sought verification that the $200 million wasn’t coming from customer funds. They drafted a letter to ensure that MF Global stood in compliance with securities rules. And MF Global never sent the letter back.

If this is true, among other things, it will prove that Corzine lied to Congress when he told the House Financial Services Committee last December that he didn’t know where the customer funds went and that “I did not instruct anyone to lend customer funds to anyone.” Corzine’s statement on the memo claims that he didn’t know which account they would use to cover the overdraft, or which funds were contained in it. But this maintenance of ignorance only can get you so far; it’s impossible to believe that an assistant treasurer would just make a call like that on her own. You don’t get much more of an open and shut case than this. And as noted above, O’Brien will testify before Congress, presumably verifying the Corzine order, this coming week.

Corzine pretty much has to go to jail at this point. You have direct evidence of him stealing $200 million in customer funds to pay off his firm’s bad bets. If Corzine walks, you have to ask yourself as an investor if your brokers just have a license to rip you off with impunity in America.