The architect of a recent legal crackdown on Wall Street's dubious mortgage practices was not the attorney general, a United States attorney or a rising star in the Justice Department. Instead, it was Leon W. Weidman, an unassuming 69-year-old career prosecutor, toiling away in anonymity 3,000 miles from Washington.
For much of his 43 years as a government lawyer, Mr. Weidman led a small group of federal prosecutors in Los Angeles. In the 1990s and 2000s, he and his team brought nearly 200 civil fraud lawsuits against two-bit mortgage crooks and small-business cheats, using an obscure federal law created in the aftermath of the savings and loan crisis a quarter century ago.
Now the work of Mr. Weidman, a onetime engineer who earned his law degree at night, has leapt to a bigger stage: the government's campaign to punish Wall Street for the financial crisis.
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His pioneering use of the law — the Financial Institutions Reform, Recovery, and Enforcement Act of 1989, or Firrea — underpinned the Justice Department's tentative $13 billion settlement with JPMorgan Chase. The United States attorney in Manhattan, Preet Bharara, has deployed the statute most often, filing civil fraud actions against Wells Fargo, BNY Mellon and Bank of America, among others. A jury found Bank of America liable in that case last week.
The wave of cases has ignited a legal controversy, raising the question of whether federal prosecutors, in dusting off an old statute, are misapplying the law. So far, judges have blessed the government's tactics.
"It's been an extremely effective tool," said Mr. Weidman, who lives in West Los Angeles with his wife, an artist, and their 95-pound Labradoodle.
While Mr. Weidman, who is known as Lee, sought to play down his role, numerous senior Justice Department officials singled him out.
"I can't emphasize enough how significant Lee was to these lawsuits," said Thomas J. Perrelli, a partner at Jenner & Block who was the associate attorney general overseeing many of these cases. "He was the one person who developed the theory that laid the foundation for the financial crisis cases."
Mr. Weidman's work came into focus in 2009 with the economy reeling and the Obama administration under fire for not holding Wall Street banks accountable. As the Justice Department searched for new prosecutorial methods, Mr. Weidman became an overnight sensation within the agency.
Federal prosecutors flew out to California to pick his brain. He held training sessions across the country. The Justice Department assigned him to one of its most promising investigations, a civil action against the credit-rating agency Standard & Poor's.
That case hinged on Firrea. Enacted in the late 1980s after risky lending practices imperiled the savings and loan industry, the law created a powerful tool to punish fraud committed by banks and their executives.
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Firrea is unusually crafted, as it requires a criminal violation like wire fraud or mail fraud to set off the law's penalties. But because it is a civil statute, it requires a lower burden of proof than criminal charges — finding guilt by a preponderance of the evidence versus beyond a reasonable doubt.
That broad authority has alarmed some defense lawyers, who have argued that the Justice Department has stretched the application of Firrea far beyond its original intent. Bank of America, in a motion to dismiss its case, described the prosecution as having "a wildly expansive reading" of the law.
Other critics question whether the government is overcompensating for the lack of criminal cases against Wall Street. Firrea's civil actions are a cop-out, the critics say, since not one senior Wall Street executive has been charged criminally for a role in the crisis. The same office that employs Mr. Weidman — the United States attorney's office in Los Angeles — has come under fire for dropping a criminal investigation of Angelo Mozilo, the former chief executive of Countrywide Financial, one of the biggest mortgage lenders before the financial crisis.
Some investigators at the Securities and Exchange Commission, which file civil cases against big banks, have also raised objections. Federal prosecutors, the S.E.C. officials privately grouse, are encroaching on their turf.
"Realistically, for the Justice Department, the civil cases are a Plan B," said Stavros Gadinis, a professor at the University of California, Berkley, law school who focuses on financial regulation.
The federal government's deployment of the little-used law has inspired comparisons to Eliot Spitzer's novel use of the Martin Act as a cudgel against fraud. As New York's attorney general, Mr. Spitzer harnessed the powerful 1921 state law to pursue suspected wrongdoing at large Wall Street firms like Merrill Lynch.
Firrea carries similar potency. In addition to the lower burden of proof, it allows prosecutors to bring cases that take aim at misconduct as far back as 10 years — a generous statute of limitations compared with five years for criminal securities fraud. And in pursuing a Firrea lawsuit, prosecutors are allowed not only to issue subpoenas, but also to take the sworn testimony of individuals.
It also provides for hefty fines. The Justice Department used the law to sue S.& P. for more than $5 billion, accusing it of knowingly issuing misleading ratings on mortgage-backed securities. JPMorgan's tentative $13 billion settlement over its sale of shoddy mortgage securities would be a record — a single company has never before paid that much to the government.
Defense lawyers say that Firrea gives the government a game-changing weapon in pursuing civil cases against banks.
"In retrospect, it's surprising that prosecutors have waited so long to happen upon such a powerful statute," said Susan E. Brune, a former federal prosecutor and now a partner at Brune & Richard.
Mr. Weidman discovered Firrea in the early 1990s while thumbing through materials in his office's law library. He briefly formed a "Firrea unit," but disbanded it when the caseload sank.
The financial crisis ignited new interest in the law. With criminal investigations of banks facing an uncertain future, the attorney general, Eric H. Holder Jr., instructed Tony West, who at the time ran the Justice Department's civil division in Washington, to pursue his own cases. Mr. Perrelli, then a top government lawyer, thought of Mr. Weidman.
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At a legal conference in South Carolina, Mr. West and Mr. Weidman met to discuss Firrea. Soon after, in late 2009, the Justice Department issued a subpoena to S.&. P. based on Firrea. And in May 2010, one official said, Mr. West circulated a three-page memo to every United States attorney in the country, urging broader use of Firrea. Citing the "potential deterrent effect," Mr. West outlined the Justice Department's "guidelines for approval" of cases under Firrea.
That same month, the Justice Department published a "white paper" by Mr. Weidman explaining Firrea's benefits. He noted that the number of reported mortgage frauds had been growing astronomically, rising more than 272 percent from 2004 to 2008, citing an F.B.I. report.
In lectures, Mr. Weidman reminded prosecutors that banks, unlike people, cannot go to jail. Flashing a picture of Alcatraz prison, and noting that a company could never land there, Mr. Weidman argued that Firrea and its fines were the strongest tool at the government's disposal.
Federal prosecutors in Manhattan were among the first to seize on Mr. Weidman's work. In 2009, Mr. Bharara, the United States attorney in Manhattan, made it a priority to beef up his office's civil division. He recruited Andrew W. Schilling, a former prosecutor who had left for private practice, to return to government and run the unit.
The office soon sent several prosecutors on a fact-finding mission to Los Angeles, where they met with Mr. Weidman to discuss the law. As they learned more, they decided to put Firrea to work on a grander scale, using it to bring cases against some of the country's largest banks, including Bank of America, Wells Fargo, BNY Mellon and Citigroup.
"No one had ever brought cases like this before, but no one had ever seen conduct like this before," Mr. Bharara said in a recent interview at his office in Lower Manhattan.
Banks have challenged the government's cases, but at least four federal judges have denied the banks' motions to dismiss these cases, lending credibility to Mr. Weidman's strategy.
Born in Chicago, Mr. Weidman received his undergraduate degree in physics from the University of California, Los Angeles. He then moved to Pittsburgh, where he worked as a project engineer for Westinghouse's nuclear division and earned his law degree from Duquesne University.
Mr. Weidman joined the Justice Department in Philadelphia straight out of law school and moved to Los Angeles a few years later, working on antitrust and white collar fraud cases before being named head of the office's civil division in 1990.
In an era when lawyers routinely shuttle between the Justice Department and lucrative law firm partnerships, Mr. Weidman is something of a relic. Earning a government salary of $155,000 a year, he says he has no plans to spin his recent success into a seven-figure salary.
"I'm not going anywhere," he said. "There's plenty of work left to do."
—By Peter Lattman and Ben Protess of The New York Times