01/30/2013 09:33 am ET Updated Apr 01, 2013

Lanny Breuer To Step Down As Justice Department's Criminal Division Chief

* Lanny Breuer to leave on March 1

* Chief since 2009, plans return to private sector

By Aruna Viswanatha

WASHINGTON, Jan 30 (Reuters) - The head of the U.S. Justice Department's criminal division, who has shouldered much of the blame for bringing few cases related to the financial crisis, but who also led the unit to record settlements, will step down on March 1.

Lanny Breuer, 54, who previously worked as a defense lawyer and in the Clinton White House, has led the division since 2009. His deputy, Mythili Raman, will serve as acting head of the division once Breuer departs.

Breuer said he planned to join a law firm or another position in the private sector, but said he had yet to begin talks with any prospective employers.

"As I wrote to the President, and want to tell you, serving as the head of this remarkable Division has been the greatest privilege of my professional life," Breuer said in a memo to criminal division employees dated Tuesday.

Critics blamed Breuer for the department's failure to bring major prosecutions against companies and individuals who played a role in the 2007-2009 financial crisis, including taxpayer-rescued American International Group or Goldman Sachs, the subject of congressional scrutiny for the way it sold securities to investors.

But Breuer also steered the division to enter into several record-breaking settlements involving financial and environmental crimes.

BP Plc agreed to a $4 billion penalty over the 2010 Gulf oil spill, HSBC Holdings Plc forfeited $1.2 billion over money laundering lapses, and several top banks agreed to fines in the hundreds of millions of dollars to resolve charges that they manipulated benchmark interest rates including Libor.

"I'd like to think that my successor will find the criminal division is at the center of many of the largest criminal law cases and criminal policy issues," Breuer said in an interview.

While the division has historically helped regional U.S. attorneys pursue fraud and other criminal cases and handled a mix of its own matters involving public corruption, healthcare fraud, computer crimes and foreign bribery, it often left the biggest financial fraud cases to the U.S. Attorney's office in Manhattan.

When Breuer joined the department, he restructured the division and recruited new prosecutors and managers from top tier law firms and other federal prosecuting offices including from Manhattan, an office which did not often lose talent to the Washington-based criminal division.

The Fraud Section within the division had 3,000 candidates apply for about three dozen spots in the past few years.

New courtroom training exercises also have led to record numbers of trials. The Public Integrity Section, for example, tried 28 cases in the past two years and secured 23 guilty verdicts and one guilty plea.

But the changes have elicited mixed reviews from insiders. Some have said that new supervisor-level positions have created additional layers of bureaucracy that slow cases and give the division the structure of a big law firm.

Others likened the greater supervision in Washington to similar programs in such elite prosecuting offices as New York's.


Breuer has defended the department's lack of cases tied to the financial crisis in public forums and on such television programs such as 60 Minutes and Frontline, becoming something of a public face for the issue.

As Assistant Attorney General, Breuer said, it was important to articulate the position of the Department of Justice. But he also pointed out that there were 94 U.S. Attorneys offices. "Nobody brought these cases," he told Reuters.

Breuer and others have said the department investigated the cases thoroughly, but did not find enough evidence to prove criminal intent.

"Not once in my four years did career prosecutors come to me and say, 'We have this case with this very narrow securitization issue and we should bring it,' and I said 'no'."

As Breuer re-enters the private sector, possible prospects include returning to Covington & Burling, where he and Attorney General Eric Holder worked before joining the Justice Department.

Breuer could also join Jenner & Block, which is home to other alumni from the Obama administration and recently lost its top white-collar defense lawyer when Andrew Weismann joined the FBI as its general counsel.



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