Leon W. Weidman

With the government struggling to hold banks liable for conduct that precipitated the 2008 financial crisis, the playbook of career prosecutor Leon W. "Lee" Weidman suddenly became a stunning trump card for the U.S. Department of Justice.

Based on a little-used statute from the 1980's, the Financial Institutions Reform, Recovery, and Enforcement Act or Firrea, Weidman's legal theories have had a remarkable impact on the once stagnant enforcement proceedings aimed at financial institutions. The statute is unique because it requires some element of criminal conduct wire fraud, false statements, etc. but because it is civil in nature, the bar for proof is lower, making it easier for the prosecution.

Weidman's has used the strategy since the 1990s to attack small-time mortgage fraud and other relatively low-level crime. But Central District U.S. attorney's office's civil division chief's familiarity with Firrea ultimately became the biggest prosecutorial asset in taking on the financial industry.

It's been the underpinning for nearly all the multibillion-dollar bank settlements $13 billion from JPMorgan Chase; $7 billion from Citibank; a looming agreement with Bank of America NA that could reach a record $16 billion and in the litigation context with the $5 billion ongoing lawsuit the government brought against Standard & Poor's Financial Services LLC.

While the strategy has come under fire from both sides bank critics say the lack of criminal prosecutions is unacceptable and financial industry champions are leery of the astronomic fines there's no doubting its efficacy in bringing banks to the bargaining table. That's a position the government would not find itself in without Weidman's pioneering work.

Weidman was unavailable for comment.

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