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The Justice Department is preparing to announce that Barclays, JPMorgan Chase, Citigroup and the Royal Bank of Scotland will collectively pay several billion dollars and plead guilty to criminal antitrust violations for rigging the price of foreign currencies, according to people briefed on the matter who spoke on the condition of anonymity. Most if not all of the pleas are expected to come from the banks’ holding companies, the people said — a first for Wall Street giants that until now have had only subsidiaries or their biggest banking units plead guilty.

The Justice Department is also preparing to resolve accusations of foreign currency misconduct at UBS. As part of that deal, prosecutors are taking the rare step of tearing up a 2012 nonprosecution agreement with the bank over the manipulation of benchmark interest rates, the people said, citing the bank’s foreign currency misconduct as a violation of the earlier agreement. UBS A.G., the banking unit that signed the 2012 nonprosecution agreement, is expected to plead guilty to the earlier charges and pay a fine that could be as high as $500 million rather than go to trial, the people said.

Holding companies, while appearing to be the most important entities at the banks, are in less jeopardy of suffering the consequences of guilty pleas. Some banks worried that a guilty plea by their biggest banking units, which hold licenses that enable them to operate branches and make loans, would be riskier, two of the people briefed on the matter said. The fear, they said, centered on whether state or federal regulators might revoke those licenses in response to the pleas. Advertisement Continue reading the main story Behind the scenes in Washington, the banks’ lawyers are also seeking assurances from federal regulators — including the Securities and Exchange Commission and the Labor Department — that the banks will not be barred from certain business practices after the guilty pleas, the people said. While the S.E.C.’s five commissioners have not yet voted on the requests for waivers, which would allow the banks to conduct business as usual despite being felons, the people briefed on the matter expected a majority of commissioners to grant them.In reality, those accommodations render the plea deals, at least in part, an exercise in stagecraft. And while banks might prefer a deferred-prosecution agreement that suspends charges in exchange for fines and other concessions — or a nonprosecution deal like the one that UBS is on the verge of losing — the reputational blow of being a felon does not spell disaster.

In 2012, former Navy linguist James F. Hitselberger was indicted on two felony counts under the Espionage Act statutes after several classified documents were found in his possession. In 2013, a superseding indictment charged him with another four felony counts. But in the end, Mr. Hitselberger pleaded guilty this year to a single misdemeanor charge of removing classified documents without authorization. Now both the defense and the prosecution are endorsing Hitselberger’s request that any jail penalty be limited to the time he has already served, including two months in DC jail and eight months of home confinement. The sentencing hearing is scheduled for July 17. Despite the stark disparity between the multiple felony counts with which Hitselberger was charged, and the single misdemeanor of which he was convicted, the prosecution said that it had no second thoughts about the way the matter was handled.

“It is important to note that the government’s case against Mr. Hitselberger did not collapse,” prosecutors said in a June 27 sentencing memorandum. To the contrary, prosecutors wrote, “in several ways, the government’s case became stronger than what it had been when the charges were first obtained.” Defense attorneys disputed that assertion and said the government had overreached. “At a minimum, the evidence demonstrates that the government significantly overcharged the case, and the guilty plea to a misdemeanor not only was the appropriate result, but also demonstrates how the offense should have been charged from the beginning,” the defense wrote in a June 27 reply. The mountain of Espionage Act charges that yielded a molehill of a misdemeanor in this case recalls a similar progression in the prosecution of former NSA official Thomas Drake, where ten felony counts gave way to a technical misdemeanor. This recurring pattern may indicate that overcharging is a standard prosecutorial approach to such cases, or that the judicial process is effectively winnowing out excessive felony charges, or perhaps both.

A June 26 sentencing memorandum submitted by the defense presented its own account of the facts of the case, along with several moving testimonials from Hitselberger’s friends and relatives as to his character. In another pending Espionage Act case, the Obama Administration must decide if it will pursue a subpoena against New York Times reporter James Risen. For a current update, see Reporter’s Case Poses Dilemma for Justice Dept. by Jonathan Mahler, New York Times, June 27.

A US Navy official has pleaded guilty to conspiracy and bribery charges, admitting he received envelopes of cash and the services of prostitutes from a Singapore-based company at the center of a multimillion-dollar fraud investigation. John Beliveau II, a supervisor in the Naval Criminal Investigative Service (NCIS), entered his plea at a hearing in federal court in San Diego, California on Tuesday. The bribery scandal has ensnared six US Navy officials so far and could lead to an expansion of the investigation if Beliveau cooperates with authorities as part of his plea agreement.

Beliveau became the first to be convicted in the bribery probe involving US Navy contracts worth hundreds of millions of dollars in maintenance and restocking for Pacific Fleet ships. Beliveau, who was arrested in September, was accused of accepting money, travel and hotel costs for trips to Thailand and Indonesia from a Malaysian contractor, where he was also provided with prostitutes, according to charging documents.

According to the plea, Beliveau gave Francis detailed advice on how to thwart a years-long NCIS investigation against him, leaking the names of witnesses and sharing hundreds of pages of confidential NCIS files with him. In exchange, he received travel and dinners worth thousands of dollars, at least five envelopes of cash, and the services of prostitutes, the document said.

Eric Holder: The Justice Department could strike deal with Edward SnowdenMichael IsikoffChief Investigative CorrespondentJuly 6, 2015Former U.S. Attorney General Eric Holder. (Photo: Olivier Douliery-Pool/Getty) Former Attorney General Eric Holder said today that a “possibility exists” for the Justice Department to cut a deal with former NSA contractor Edward Snowden that would allow him to return to the United States from Moscow. In an interview with Yahoo News, Holder said “we are in a different place as a result of the Snowden disclosures” and that “his actions spurred a necessary debate” that prompted President Obama and Congress to change policies on the bulk collection of phone records of American citizens. Asked if that meant the Justice Department might now be open to a plea bargain that allows Snowden to return from his self-imposed exile in Moscow, Holder replied: “I certainly think there could be a basis for a resolution that everybody could ultimately be satisfied with. I think the possibility exists.”

But his remarks to Yahoo News go further than any current or former Obama administration official in suggesting that Snowden’s disclosures had a positive impact and that the administration might be open to a negotiated plea that the self-described whistleblower could accept, according to his lawyer Ben Wizner.

It’s also not clear whether Holder’s comments signal a shift in Obama administration attitudes that could result in a resolution of the charges against Snowden. Melanie Newman, chief spokeswoman for Attorney General Loretta Lynch, Holder’s successor, immediately shot down the idea that the Justice Department was softening its stance on Snowden. “This is an ongoing case so I am not going to get into specific details but I can say our position regarding bringing Edward Snowden back to the United States to face charges has not changed,” she said in an email.

In a case described by lawyers as a "tale of greed run amok", a trader who hid a £351m loss so he could pocket a £4.5m bonus has become the most senior City figure to be convicted for the kind of mortgage fraud that helped precipitate the global financial crisis.

After years of being pursued by US authorities, who eventually extradited him from the UK to face justice, Serageldin finally pleaded guilty to conspiracy in a packed New York City courtroom on Friday. His conviction will go a small way to answering claims that those responsible for the financial crisis have escaped being held to account for their actions.

He told the US District Judge Alvin Hellerstein he did it "to preserve my reputation in the bank at a time when there was great financial turmoil in the marketplace". Higgs and Siddiqui previously pleaded guilty to overstating the value of the mortgage-backed assets, which were held in a portfolio called ABN1. But both men, who agreed to co-operate with prosecutors, claimed they acted at Serageldin's direction. Under a plea agreement with the government, Serageldin agreed to forfeit £650,000 as proceeds of the crime, and under federal sentencing guidelines, Serageldin is likely to receive about five years in prison when he is sentenced on 2 August.

After years of being held at the US Naval Base in Cuba without trial, Ibrahim Idris, one of two Sudanese detainees released on Thursday, said US prison officials had "systematically tortured" him in the course of his 11-year imprisonment at Gitmo. Idris, who has been described by US officials as mentally ill, delivered his comments in a news conference in Khartoum, just hours after returning home courtesy of a US military plane. Appearing weak and speaking with apparent difficultly, Idris gave a brief account of his lengthy imprisonment at Gitmo. “We have been subjected to meticulous, daily torture," he said. "We were helpless…on an isolated island, surrounded by weapons." He praised the Sudanese government and human rights organizations for working to secure the release of prisoners at Gitmo, which has been called “the GULAG of our times” by Amnesty International. Closed-door military tribunals, for example, have been riddled with problems, including courtroom speakers that have a mysterious tendency for being blocked during key testimony.

Another released detainee, Noor Othman Muhammed, was unable to attend the conference because he was recovering in the hospital, Idris said. On Feb. 18, 2011, Muhammed pleaded guilty in a military tribunal to offenses under the Military Commissions Act of 2009, and was sentenced to 14 years confinement, according to a Defense Department news release. In exchange for his guilty plea and Muhammed's cooperation with prosecutors, the military court agreed through a pre-trial agreement to suspend all confinement in excess of 34 months. Idris, who had been designated for transfer since 2009, said some of the former prisoners had pled guilty in a bid to secure their freedom. As Barack Obama wins congressional approval to transfer some prisoners from Guantanamo Bay to their home countries, a released Sudanese inmate spoke of the torture he and others endured at the hands of their American jailers. Approval for a partial detainee release is contained in the National Defense Authorization Act, which passed the Senate by an 84-15 vote on Thursday night.

While the bill does not address all of the administration's concerns, its provisions ... will provide the administration additional flexibility to transfer detainees abroad consistent with our national security interests," White House spokesman Jay Carney said earlier Thursday. Of those still held in the prison, five individuals stand accused of participating in the Sept. 11, 2001 terrorist attacks. At the same time, some four dozen detainees are considered “too dangerous” to be released. About half of Gitmo's 158 detainees have been cleared to be released since 2009, yet congressional restrictions prevented that from happening.

The sordid tale of marital infidelity, cyber-stalking, and spilled secrets surrounding former CIA director David Petraeus is scheduled to come to a close Thursday, when the former four-star general is sentenced for his crimes. But Petraeus’s punishment will likely have lasting ramifications on future leak cases, national security lawyers said. They argue the government is cutting its own throat by offering him a more lenient sentence in the wake of harsher penalties to other leakers and creating a double standard that can be exploited by defense attorneys in future cases.“This is a horrible choice by the government,” said Mark Zaid, a national security lawyer for more than two decades. “I think it is going to have a negative impact. The judges who are going to be truly objective are going to look at the Petraeus case. Going forward, it is going to hurt the government’s cases.”

The hearing Thursday to sentence Petraeus for giving his former girlfriend and biographer highly classified information will happen only a few miles from her home in North Carolina. Petraeus will enter his plea on one misdemeanor count of unauthorized removal and retention of classified material before U.S. Magistrate Judge David Keesler in Charlotte. Petraeus is the second director of the CIA to be convicted for actions while leading the agency. President Nixon’s director, Richard Helms, was convicted in 1978 of lying to Congress about the CIA’s role in overthrowing President Salvador Allende of Chile. He received a two-year suspended sentence and a $2,000 fine.

And after John M. Deutsch, who served under President Clinton, left office, he was accused of mishandling classified information on his laptop. He lost his security clearance, but he was never prosecuted. Clinton pardoned him on his last day as president. Petraeus has the distinction, however, of being the only director forced to resign because of misdeeds while serving,

Lawyers for Jeffrey Sterling, convicted earlier this year of leaking classified information to New York Times reporter James Risen, urged today that Sterling “not receive a different form of justice” than David Petraeus, the former general and CIA director who has pleaded guilty to a misdemeanor for leaking classified information to his biographer. While Petraeus will not go to jail — yesterday a judge sentenced him to two years probation and a $100,000 fine — prosecutors have asked for a “severe” sentence against Sterling within federal guidelines of 19 to 24 years in prison. In January, a jury convicted Sterling, a former CIA agent, on nine counts related to leaking information to Risen, a Times reporter who in 2006 wrote a book that revealed the agency had mishandled a program to disrupt Iran’s nuclear weapons program. Sterling’s lawyers, Edward MacMahon Jr. and Barry Pollack, filed their sentencing memorandum today, arguing that their client “should be treated no more harshly than any other person who has been charged and convicted of ‘leaking’ to the press.” In addition to Petraeus, they cited the cases of John Kiriakou, a former CIA agent who was sentenced to 30 months in prison, and Stephen Kim, who received a 13-month sentence. Unlike Petraeus, Kiriakou and Kim, who reached plea agreements, Sterling took his case to a jury. He is scheduled to be sentenced on May 11.

“He should be treated similarly to others convicted for the same crimes and not singled out for a long prison sentence because he elected to exercise his right to trial,” the lawyers stated. “[T]he court cannot turn a blind eye to the positions the government has taken in similar cases.” The Petraeus and Sterling cases have highlighted another disparity in the government’s handling of leak cases: powerful officials like Petraeus are treated leniently while mid-level ones like Kiriakou, Kim and Sterling go to jail. In the Petraeus case, the government claims no harm was caused by his leak, because none of the information he leaked to Paula Broadwell, his biographer and onetime lover, was published, whereas the information published by Risen had caused “substantial damage” to national security. However, this characterization was called “overwrought hyperbole” by a former CIA official in a letter of support for Sterling released today by his lawyers. David J. Manners, a former station chief in Prague and Amman as well as chief of the agency’s Iran task force, described as “not credible” the prosecution’s claim that Risen’s book severely hurt the CIA’s ability to recruit spies. Manners, who first met Sterling when both worked at the agency, noted that the government itself has often disclosed the role of intelligence operatives.

“While such disclosures are never helpful, they happen all the time (and sometimes the United States quietly endorses the disclosure — read some of Bob Woodward’s books, or look at Agency collaboration on the film about the bin Laden raid),” Manners wrote. Sterling’s lawyers called attention to what they regard as another inequity in the treatment of Petraeus and their client. Petraeus admitted in his plea agreement that the classified information he leaked included highly sensitive names of covert operatives, war plans for U.S. forces, as well as details about his discussions with senior officials, including President Obama. Petraeus also admitted to lying to FBI agents about what he had done. Sterling, his lawyers noted, “revealed the names of no covert personnel and never lied about his actions to the FBI.” The prosecution appears to be trying to do more than put Sterling behind bars for two decades; it appears to be trying to rewrite history and put an end to leaks of information that embarrass the government.

NEW YORK -- Convicted hacker Jeremy Hammond was sentenced Friday to 10 years in prison for stealing internal emails from the global intelligence firm Stratfor.

Hammond, 28, has a lengthy criminal record for his protests both online and off against targets like the 2004 Republican National Convention and pro-Iraq War activists. But stealing Stratfor files as part of the online hacking collective Anonymous gave him a new level of notoriety. In May, he pleaded guilty to one conspiracy charge for hacking the Texas-based private intelligence firm Strategic Forecasting, or Stratfor. The security breach resulted in the theft of employee emails and account information for approximately 860,000 Stratfor subscribers and clients, including information from 60,000 credit cards. Although Hammond did not use the credit cards himself, he urged supporters to use them to make donations to charities. The resulting fraudulent charges led to headaches for nonprofits and for the private individuals who had their phone numbers and email addresses exposed. The government charges originally added up to 30 years in prison, but Hammond took a plea deal for violating the Computer Fraud and Abuse Act, a federal anti-hacking law also used to prosecute internet freedom activist Aaron Swartz. He admitted to hacking several other websites, including the Arizona Department of Public Safety, Special Forces Gear, the Boston Police Patrolmen's Association, and the sheriff's office in Jefferson County, Ala.

Nearly 5 million emails obtained in the Stratfor hack were turned over to WikiLeaks by Hammond and published as the “Global Intelligence Files.” They revealed domestic spying on activists, including Occupy Wall Street. The resulting media publicity led some, including 4,000 online petition backers and Pentagon Papers leaker Daniel Ellsberg, to hail him as a whistleblower. But to the federal government, he was little more than a common thief. “While he billed himself as fighting for an anarchist cause, in reality, Jeremy Hammond caused personal and financial chaos for individuals whose identities and money he took and for companies whose businesses he decided he didn’t like," United States Attorney Preet Bharara said in a May statement. On Friday, Hammond, who has been in detention for 20 months, struck back. While apologizing to the innocent people who had their personal information exposed as a result of his leaks, he lashed out at the FBI, and Hector Xavier Monsegur, an informant widely known by his online name "Sabu." For months, Hammond claimed, Sabu guided him as he hacked the Stratfor website and thousands more around the world.

In a highly anticipated address last night, President Barack Obama authorized a significant expansion of the U.S. campaign to “degrade and ultimately destroy” the Islamic State in Iraq and Syria, backed by a broad coalition of allies. His four-part strategy against ISIS will involve a “systematic campaign of airstrikes” against the militants “wherever they are,” including Syria; the deployment of an additional 475 advisers to Iraq; and new support for the moderate Syrian opposition. Obama sought to distinguish his campaign from the wars in Iraq and Afghanistan, likening the mission to U.S. strikes against suspected terrorists in Yemen and Somalia [Reuters’ Steve Holland and Roberta Rampton; Washington Post’s Juliet Eilperin and Ed O’Keefe]. Saudi Arabia has agreed to provide a training base for moderate Syrian opposition fighters—which forms part of the president’s strategy—following an American request [New York Times’ Michael R. Gordon and Eric Schmitt].

Lauren French [Politico] discusses the mixed reactions to Obama’s speech on the Hill. The Syrian National Coalition, the main Western-supported opposition group, issued a statement yesterday welcoming President Obama’s announcement that the U.S. would conduct airstrikes targeting the Islamic State in Syria [Associated Press]. Australia and Japan also expressed their support for the president’s strategy this morning [Wall Street Journal’s Rob Taylor and Alexander Martin]. However, there has been a “muted response” to Obama’s address from Arab states in the Gulf region [Wall Street Journal’s Rory Jones].

Reuters (David Lawder and Patricia Zengerle) reports that U.S. lawmakers are considering a congressional vote on President Obama’s plan, but several Republicans want further information on the strategy to battle global terrorism, while many would prefer a vote wider than one focused solely on funding for the Syrian opposition. And The Daily Beast (Josh Rogin and Tim Mak) writes that Democrats are ready to approve Obama’s request for $5 billion to counter terrorism, despite the lack of details on how the money would be used. The Wall Street Journal (Julian E. Barnes and Siobhan Gorman) focuses on the president’s plan to rely on U.S.-trained local forces to battle the Islamic State, noting America’s “poor track record” of relying on local forces in Iraq and Libya.

More than six months after the US government finally dropped all charges against Dr. Sami Al-Arian, the stateless Palestinian academic and activist was deported yesterday to Turkey. During his appearance on Democracy Now! today, Dr. Al-Arian expressed relief that his twelve-year-long persecution in the US, where he lived for forty years, had finally come to an end. “It feels like I’m free, finally really feeling freedom for the first time in twelve years,” Dr. Al-Arian said.

During the half-hour segment, Dr. Al-Arian revealed how he campaigned for George W. Bush, helping him win crucial votes from the Muslim community that would clinch his 2000 presidential election victory in the decisive state of Florida. Dr. Al-Arian was very active politically, and had visited the White House several times during both the Bush and Clinton administrations. Regarding his role in Bush’s election, Dr. Al-Arian said that he received a call “from someone who was very close to [Bush advisor] Karl Rove” asking how the campaign could win the endorsement of the Muslim American community. Dr. Al-Arian told this contact that Bush needed to declare his support for proposed legislation against secret evidence being used against Arab and Muslim Americans. During the second presidential candidate debate, Dr. Al-Arian told Democracy Now!, Bush did just that, securing the support of Muslim and Arab American leaders.

His administration had invited these leaders to the White House after Bush took office for a big announcement of good news regarding the legislation. “Unfortunately, it was on 9/11,” Dr. Al-Arian said, referring to the 11 September 2001 attacks in the US. “So that meeting never happened.” Instead, the country went in a very different direction. “At the time, we were protesting secret evidence,” Dr. Al-Arian added. “What happened after 9/11 is that they were arresting people with no evidence.”

JPMorgan Chase is set to pay a record $920 million to resolve probes from three federal agencies over its role in the manipulation of global markets for metals and Treasurys.The figure was released Tuesday morning by the Commodity Futures Trading Commission in a statement from Commissioner Dan Berkovitz. Last week, news reports indicated that the New York-based bank was nearing a settlement of almost $1 billion.The penalty is a record for spoofing, which is when sophisticated traders flood markets with orders that they have no intention of actually executing. The practice was banned after the 2008 financial crisis and regulators have made it a priority to stamp out.Of the $920 million, $436.4 million is a criminal monetary penalty, $172 million is a “criminal disgorgement amount” and $311.7 million is for victim compensation, according to the Department of Justice.

JPMorgan Chase is set to pay a record $920 million to resolve probes from three federal agencies over its role in the manipulation of global markets for metals and Treasurys.The figure was released Tuesday morning by the Commodity Futures Trading Commission in a statement from Commissioner Dan Berkovitz. Last week, news reports indicated that the New York-based bank was nearing a settlement of almost $1 billion.The penalty is a record for spoofing, which is when sophisticated traders flood markets with orders that they have no intention of actually executing. The practice was banned after the 2008 financial crisis and regulators have made it a priority to stamp out.Of the $920 million, $436.4 million is a criminal monetary penalty, $172 million is a “criminal disgorgement amount” and $311.7 million is for victim compensation, according to the Department of Justice.

The bank, the biggest U.S. lender by assets, has entered into a deferred prosecution agreement with the DOJ that will expire in three years if the firm satisfies its obligations under the deal. 

The former CIA officer John Kiriakou was sentenced Friday to more than two years in prison, by a federal judge who rejected arguments that he was acting as a whistleblower when he leaked a covert officer's name to a reporter. A plea deal required the judge to impose a sentence of two and a half years. US district judge Leonie Brinkema said she would have given Kiriakou much more time if she could.Kiriakou's supporters describe him as a whistleblower who exposed aspects of the CIA's use of torture against detained terrorists. Prosecutors said Kiriakou was merely seeking to increase his fame and public stature by trading on his insider knowledge. The 48-year-old Arlington resident pleaded guilty last year to violating the Intelligence Identities Protection Act. No one had been convicted under the law in 27 years.

His 2007 interviews about the interrogations of Abu Zubaydah were among the first by a CIA insider confirming reports that several detainees, including Abu Zubaydah, had been waterboarded.

A former head of a major Irish bank has been extradited from the U.S. and brought before Dublin District Court to face several charges stemming from the bank’s role in the 2008 financial crisis. David Drumm, former chief executive of Irish Anglo Bank from 2005 until 2008, had been arrested in Boston in October 2015, and originally attempted to fight extradition — but he recently withdrew the objection and was returned to Ireland early on Monday. Drumm faces 33 charges in Ireland, which echoes Iceland’s unprecedented move to hold its bankers criminally accountable for their role in that country’s economic meltdown. Though Drumm predictably denied wrongdoing, his charges include “fraud, forgery, misleading management reporting, unlawful lending, falsifying documents, and false accounting, linked to financial transactions prior to the collapse of Anglo,” according to the Irish Times.

Though prosecutors consider Drumm a flight risk — after all, he seemed to be seeking safe haven inside the United States — the court allowed the ex-banker to post bail under several conditions. Drumm’s passport is currently being held by the Gardaí (Garda Síochána, or Irish Police), and under the bail arrangement, he assured the court he would not apply for another and does not possess a U.S. passport. Seven of Drumm’s relatives offered to put their houses on the line as ‘security’ for his bail, though the judge only required four names. As RT reported, Drumm is alleged to have participated in transactions totaling around €7 billion between Anglo and a second lending institution, Irish Life and Permanent. Anglo “posted the worst corporate results in Irish history with losses of €17.5 billion for 2010.” Drumm came to the United States in 2009, and reportedly refused to cooperate with an investigation. Prosecutors fear his “capacity to marshal significant sums” of money adds to the possibility Drumm could easily disappear. However, his solicitor argued that in order to better prepare his defense — including sorting through the “millions of documents” and nearly 400 hours of phone conversations — Drumm needed to remain out of prison. As the Times noted, two “books” of evidence will need to be heard by the court — one of which entails bringing 120 witnesses to testify. The former banking executive has not yet entered a formal plea. He faces a maximum penalty of 10 years in prison if found guilty.

JPMorgan Chase and federal authorities are nearing settlements over the bank's ties to Bernard L. Madoff, striking tentative deals that would involve roughly $2 billion in penalties and a rare criminal action. The government will use a sizable portion of the money to compensate Mr. Madoff's victims. The settlements, which are coming together on the anniversary of Mr. Madoff's arrest at his Manhattan penthouse five years ago on Wednesday, would fault the bank for turning a blind eye to his huge Ponzi scheme, according to people briefed on the case who were not authorized to speak publicly.

A settlement with federal prosecutors in Manhattan, the people said, would include a so-called deferred-prosecution agreement and more than $1 billion in penalties to resolve the criminal case. The rest of the fines would be imposed by Washington regulators investigating broader gaps in the bank's money-laundering safeguards. The agreement to deferred prosecution would also list the bank's criminal violations in a court filing but stop short of an indictment as long as JPMorgan pays the penalties and acknowledges the facts of the government's case. In the negotiations, the prosecutors discussed the idea of extracting a guilty plea from JPMorgan, the people said, but ultimately chose the steep fine and deferred-prosecution agreement, which could come by the end of the year.

The government has been reluctant to bring criminal charges against large corporations, fearing that such an action could imperil a company and throw innocent employees out of work. Those fears trace to the indictment of Enron's accounting firm, Arthur Andersen, which went out of businesses after its 2002 conviction, taking 28,000 jobs with it. Ever since, prosecutors have increasingly relied on deferred-prosecution agreements, which rebuke companies without threatening their health. Although a Wall Street bank has never faced a deferred-prosecution agreement, according to a University of Virginia Law School database, Wachovia and the banking arm of American Express have entered into such deals. The agreements, however, have fueled concern that some banks, having grown so large and interconnected, are too big to indict.

While we've been disappointed that Senator Chuck Grassley appears to have a bit of a double standard with his staunch support for whistleblowers when it comes to Ed Snowden, it is true that he has fought for real whistleblower protections for quite some time. Lately, he's been quite concerned that the White House's "Insider Threat Program" (ITP) is really just a cover to crack down on whistleblowers. As we've noted, despite early promises from the Obama administration to support and protect whistleblowers, the administration has led the largest crackdown against whistleblowers, and the ITP suggests that the attack on whistleblowers is a calculated response. The program documentation argues that any leak can be seen as "aiding the enemy" and encourages government employees to snitch on each other if they appear too concerned about government wrong-doing. Despite all his high minded talk of supporting whistleblowers, President Obama has used the Espionage Act against whistleblowers twice as many times as all other Presidents combined. Also, he has never -- not once -- praised someone for blowing the whistle in the federal government.

Given all of that, Senator Grassley expressed some concern about this Insider Threat Program and how it distinguished whistleblowers from actual threats. He asked the FBI for copies of its training manual on the program, which it refused to give him. Instead, it said it could better answer any questions at a hearing. However, as Grassley explains, when questioned about this just 10 minutes into the hearing, the FBI abruptly got up and left: Meanwhile, the FBI fiercely resists any efforts at Congressional oversight, especially on whistleblower matters. For example, four months ago I sent a letter to the FBI requesting its training materials on the Insider Threat Program. This program was announced by the Obama Administration in October 2011. It was intended to train federal employees to watch out for insider threats among their colleagues. Public news reports indicated that this program might not do enough to distinguish between true insider threats and legitimate whistleblowers. I relayed these concerns in my letter. I also asked for copies of the training materials. I said I wanted to examine whether they adequately distinguished between insider threats and whistleblowers.

In response, an FBI legislative affairs official told my staff that a briefing might be the best way to answer my questions. It was scheduled for last week. Staff for both Chairman Leahy and I attended, and the FBI brought the head of their Insider Threat Program. Yet the FBI didn’t bring the Insider Threat training materials as we had requested. However, the head of the Insider Threat Program told the staff that there was no need to worry about whistleblower communications. He said whistleblowers had to register in order to be protected, and the Insider Threat Program would know to just avoid those people. Now I have never heard of whistleblowers being required to “register” in order to be protected. The idea of such a requirement should be pretty alarming to all Americans. Sometimes confidentiality is the best protection a whistleblower has. Unfortunately, neither my staff nor Chairman Leahy’s staff was able to learn more, because only about ten minutes into the briefing, the FBI abruptly walked out. FBI officials simply refused to discuss any whistleblower implications in its Insider Threat Program and left the room. These are clearly not the actions of an agency that is genuinely open to whistleblowers or whistleblower protection.

Eric Holder was U.S. attorney general at a time when the world desperately needed the nation’s chief law enforcement officer to hold accountable the elite bankers who oversaw the epidemic of fraud that drove the 2008 global financial crisis and triggered the Great Recession. After nearly six years in office, Holder announced on Sept. 25 that he plans to step down, without having brought to justice even one of the executives responsible for the crisis. His tenure represents the worst strategic failure against elite white-collar crime in the history of the Department of Justice (DOJ).  In both the U.S. savings and loan debacle of the late 1980s and the Enron-era accounting frauds of the early 2000s, there were more than 1,000 successful felony convictions in cases designated as major by the DOJ. In both those fraud epidemics, federal prosecutors prioritized the top executives of the corporations responsible. This context makes Holder’s failure to prosecute — much less convict — the elite bank frauds that caused this far larger crisis all the more damning.

In addition to the failure to prosecute the leaders of those massive frauds, Holder’s dismal record includes 1) failing to prosecute the elite bankers who led the largest (by several orders of magnitude) price-rigging cartel in history — the LIBOR scandal, in which the world’s largest banks conspired to rig the reported interest rates at which the banks were willing to lend to one another, which affected prices on over $300 trillion in transactions; 2) failing to prosecute the massive foreclosure frauds (robo-signing), in which bank employees perjured themselves by signing more than 100,000 false affidavits in order to deceive the authorities that they had a right to foreclose on homes; 3) failing to prosecute the bid-rigging cartels of bond issuances in order to raise the costs to U.S. cities, counties and states of borrowing money in order to increase banks’ illegal profits; 4) failing to prosecute money laundering by HSBC for the murderous Sinaloa and Norte del Valle drug cartels; 5)  failing to prosecute the senior bank officers of Standard Chartered who helped fund of terrorists and nations that support terrorism; and 6) failing to prosecute the controlling officers of Credit Suisse who for decades helped wealthy Americans unlawfully evade U.S. taxes and then obstructed investigations by the DOJ and Internal Revenue Service for many years.  

the CEOs knew that they could trade off a slightly larger fine in return for complete immunity for themselves and other officers who might otherwise be flipped by federal prosecutors to testify against more senior officers. The fines, of course, would be paid not by the CEOs but by the banks they ran. Indeed, one of the lesser-known aspects of the crisis is that the DOJ almost never sued a banker (as opposed to a bank) and virtually never sought to claw back bankers’ fraud proceeds. It is telling that, as even Holder admitted last week, “A corporation may enter a guilty plea and still see its stock price rise the next day.”

COLUMBUS, OH-Former Columbus Police Officer Steven Edward Dean, 49, of Columbus, was sentenced in U.S. District Court to 30 months in prison for misappropriating and selling heavy equipment and other property the Columbus Division of Police received through a Department of Defense surplus program. Carter M. Stewart, U.S. Attorney for the Southern District of Ohio; Kevin Cornelius, Special Agent in Charge, Federal Bureau of Investigation (FBI); Brian Reihms, Special Agent in Charge, Defense Criminal Investigative Service (DCIS); and Columbus Police Chief Kim Jacobs announced the sentence handed down today by U.S. District Judge Michael H. Watson. According to court documents, an investigation by the Columbus Division of Police, the FBI and DCIS concluded that between October 1, 2005 and June 1, 2012, Dean diverted property with a fair market value of $251,570.94 the police department had received from the Defense Reutilization Marketing Office (DRMO) program. The embezzled items included $133,554.59 of heavy equipment, construction equipment, and vehicles; restaurant equipment; $94,163.25 of materials sold for scrap; and $16,353.15 worth of items, including diesel generators, sold to private persons. This conclusion was based on records obtained from the U.S. Department of Defense DRMO program, the state of Ohio offices involved with the DRMO program, scrapyard receipts, Craigslist online point-of-sale website records, restaurant supply records of sold equipment, and by viewing the items of property themselves.

Federal Bureau of Investigation - Cincinnati Field Office 08/13/2014 | Press release Former Columbus Police Officer Sentenced for Embezzling from Defense Department Surplus Program

"This is a major theft and embezzlement case involving a uniformed police officer stealing from his own department and involving property which should have otherwise been used to assist law enforcement, and all the equipment and vehicles were originally purchased with taxpayer dollars," Assistant U.S. Attorneys Doug Squires and Deborah Solove told the court prior to sentencing. "Today's sentencing demonstrates the Defense Criminal Investigative Service's ongoing commitment to combating fraud and corruption that impacts the Department of Defense's vital programs and operations," said Brian Reihms, Special Agent in Charge, Defense Criminal Investigative Service (DCIS), "DCIS, with our partner agencies, will continue to work tirelessly to investigate fraud involving the DoD's DRMO Law Enforcement Support Office which transfers excess property to law enforcement organizations across the United States." Dean pleaded guilty in February to one count of embezzlement from a program receiving federal funds and one count of theft of public property. Under terms of the plea agreement, Dean will forfeit $251,570.94 less the value of the recovered equipment. Dean was also sentenced to three years of supervised released following inprisonment. U.S. Attorney Stewart commended the investigation by DCIS, the FBI, and CPD, as well as Assistant U.S. Attorneys Doug Squires and Deborah Solove, who prosecuted the case.

Most sentient people rationally accept that the U.S. media routinely disseminates misleading stories and outright falsehoods in the most authoritative tones. But it’s nonetheless valuable to examine particularly egregious case studies to see how that works. In that spirit, let’s take yesterday’s numerous, breathless reports trumpeting the “BREAKING” news that “Edward Snowden now wants to come home!” and is “now negotiating the terms of his return!” Ever since Snowden revealed himself to the public 20 months ago, he has repeatedly said the same exact thing when asked about his returning to the U.S.: I would love to come home, and would do so if I could get a fair trial, but right now, I can’t. His primary rationale for this argument has long been that under the Espionage Act, the 1917 statute under which he has been charged, he would be barred by U.S. courts from even raising his key defense: that the information he revealed to journalists should never have been concealed in the first place and he was thus justified in disclosing it to journalists. In other words, when U.S. political and media figures say Snowden should “man up,” come home and argue to a court that he did nothing wrong, they are deceiving the public, since they have made certain that whistleblowers charged with “espionage” are legally barred from even raising that defense.

Snowden has also pointed out that legal protections for whistleblowers are explicitly inapplicable to those, like him, who are employed by private contractors (rendering President Obama’s argument about why Snowden should “come home” entirely false). One month after Snowden was revealed, Daniel Ellsberg wrote an Op-Ed in the Washington Post arguing that Snowden did the right thing in leaving the U.S. because he would not be treated fairly, and argued Snowden should not return until he is guaranteed a fully fair trial. Snowden has said all of this over and over. In June 2013, when I asked him during the online Guardian chat why he left the U.S. for Hong Kong, he said: “the US Government, just as they did with other whistleblowers, immediately and predictably destroyed any possibility of a fair trial at home . . . That’s not justice, and it would be foolish to volunteer yourself to it if you can do more good outside of prison than in it.” In January 2014, AP reported about a new online chat Snowden gave: “Snowden said returning would be the best resolution. But Snowden said he can’t return because he wouldn’t be allowed to argue at trial that he acted in the public interest when he revealed the National Security Agency’s mass surveillance programs.” In that chat, he said: “Returning to the US, I think, is the best resolution for the government, the public, and myself.”

Gingrich: “I think if we can find a way to get him home, get the rest of the documents that he has not leaked . . . it’s worth doing, but I think he’d have to serve jail time, and it’d probably be fairly lengthy. I don’t think the country would tolerate this level of betrayal, not having some very significant jail time — Blitzer: “You say lengthy. What do you think? Gingrich: “I’m not an expert in this, but I’d say more than 10 years.” Where to start? First, Gingrich’s belief that it’s possible to “get the rest of the documents that he has not leaked” is simply adorable. Second, Gingrich is a fascinating choice for CNN to have pontificate on proper punishments given that he is the first House Speaker to ever be punished for ethics violations, for which he was fined $300,000. Third, David Petraeus was just allowed to plead guilty for leaking extremely sensitive secrets — not out of a whistleblowing desire to inform the public but simply to satisfy his mistress — and will almost certainly spend no time in jail; Gingrich, Blitzer, Ignatius and friends would never dare suggest that the General should go to prison (just as DC’s stern law-and-order advocates who demand Snowden’s imprisonment would never dare suggest the same for James Clapper for having lied to Congress).