The office has handled its share of high-profile cases. It was involved in the investigation of Theodore Kaczynski, who pleaded guilty in 1998 to the two-decade Unabomber spree that injured 23 people and killed three, including a timber industry lobbyist in Sacramento.
In the late 1980s, the office created a phony shrimp processing plant and used a Gulf Coast FBI agent to pose as a corrupt businessman offering cash bribes for passage of a special interest bill. The "Shrimp Scam" sting ended in the convictions of 12 public officials, including California legislators.
While the office is not particularly known for white-collar prosecutions, Wagner said that has always been among his priorities. After getting his law degree from New York University in 1986, he spent five years at the Wall Street firm Cahill, Gordon & Reindell, working on financial cases that included securities fraud. At the Eastern District, from 2000 through 2009, he headed a special prosecutions unit that took on corporate fraud and tax evasion, along with public corruption and cybercrimes.
Equally motivating was how the mortgage crisis devastated his district. It includes the most productive farmland in the country, though its 7 million inhabitants live mostly near the urban centers of Sacramento, Fresno, Bakersfield, Stockton, Vallejo and Fairfield.
During the boom, families flocked to the Valley, buying new homes that gobbled farmland by the acre. The Central Valley's promise was simple: more space, a cheaper house and a family-friendly atmosphere.
That promise quickly soured. As the mortgage meltdown gripped Wall Street, prices tumbled and legions became saddled with bad debt, dimming the dream — promised in one town's motto — of a "bright future."
In Sacramento County, the median home price peaked at $387,000 in August 2005, then tumbled 60.5% to $152,750 in January 2012. In San Joaquin County, prices fell 67.7%, according to research firm DataQuick. From January 2008 to September of this year, more than 96,000 homes were lost to foreclosure in the two counties, according to research firm DataQuick.
As Wall Street awaits final word on the tentative $13-billion settlement, Wagner continues to pursue his criminal investigation of JPMorgan.
The bank had hoped to forestall any criminal prosecution as a condition of accepting massive civil penalties. But the Justice Department refused, according to a person briefed on the negotiations who was not authorized to speak publicly. JPMorgan walked away from the talks — only to return hours before the planned Department of Justice news conference.
The tentative settlement covers JPMorgan's liability in certain cases besides Wagner's — losses on loans sold to government-backed mortgage giants Fannie Mae and Freddie Mac, certain state investigations, and $4 billion in relief for foreclosure-ravaged areas.
In talks with the bank, Holder told JPMorgan that absolving the bank of any criminal liability would be a non-starter, said the person briefed on the negotiations. In an important twist, the civil settlement is expected to require non-criminal admissions of wrongdoing by JPMorgan.
A criminal prosecution would mark a "clear shift in attitude" at the Justice Department, said John Coffee, a securities law expert at Columbia University. Just months ago, the department caught heat for going easy on big Wall Street firms.
But if no top executives get charged, the federal government may miss an opportunity to satisfy public outrage and avert future misdeeds, said Arthur Wilmarth Jr., a law professor at George Washington University who advised the Financial Crisis Inquiry Commission.
"One has to wonder how much deterrence there is if senior officials are not held responsible," he said.
Times staff writer Andrew Khouri contributed to this report.