* 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. JusticeDepartment's criminal division, who has shouldered much of theblame for bringing few cases related to the financial crisis,but who also led the unit to record settlements, will step downon March 1.
Lanny Breuer, 54, who previously worked as a defense lawyerand in the Clinton White House, has led the division since 2009.His deputy, Mythili Raman, will serve as acting head of thedivision once Breuer departs.
Breuer said he planned to join a law firm or anotherposition in the private sector, but said he had yet to begintalks with any prospective employers.
"As I wrote to the President, and want to tell you, servingas the head of this remarkable Division has been the greatestprivilege of my professional life," Breuer said in a memo tocriminal division employees dated Tuesday.
Critics blamed Breuer for the department's failure to bringmajor prosecutions against companies and individuals who playeda role in the 2007-2009 financial crisis, includingtaxpayer-rescued American International Group or GoldmanSachs, the subject of congressional scrutiny for the wayit sold securities to investors.
But Breuer also steered the division to enter into severalrecord-breaking settlements involving financial andenvironmental crimes.
BP Plc agreed to a $4 billion penalty over the 2010Gulf oil spill, HSBC Holdings Plc forfeited $1.2billion over money laundering lapses, and several top banksagreed to fines in the hundreds of millions of dollars toresolve charges that they manipulated benchmark interest ratesincluding Libor.
"I'd like to think that my successor will find the criminaldivision is at the center of many of the largest criminal lawcases 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 amix of its own matters involving public corruption, healthcarefraud, computer crimes and foreign bribery, it often left thebiggest financial fraud cases to the U.S. Attorney's office inManhattan.
When Breuer joined the department, he restructured thedivision and recruited new prosecutors and managers from toptier law firms and other federal prosecuting offices includingfrom Manhattan, an office which did not often lose talent to theWashington-based criminal division.
The Fraud Section within the division had 3,000 candidatesapply for about three dozen spots in the past few years.
New courtroom training exercises also have led to recordnumbers of trials. The Public Integrity Section, for example,tried 28 cases in the past two years and secured 23 guiltyverdicts and one guilty plea.
But the changes have elicited mixed reviews from insiders.Some have said that new supervisor-level positions have createdadditional layers of bureaucracy that slow cases and give thedivision the structure of a big law firm.
Others likened the greater supervision in Washington tosimilar programs in such elite prosecuting offices as NewYork's.
BACK TO PRIVATE PRACTICE
Breuer has defended the department's lack of cases tied tothe financial crisis in public forums and on such televisionprograms such as 60 Minutes and Frontline, becoming something ofa public face for the issue.
As Assistant Attorney General, Breuer said, it was importantto articulate the position of the Department of Justice. But healso 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 thecases thoroughly, but did not find enough evidence to provecriminal intent.
"Not once in my four years did career prosecutors come to meand say, 'We have this case with this very narrow securitizationissue and we should bring it,' and I said 'no'."
As Breuer re-enters the private sector, possible prospectsinclude returning to Covington & Burling, where he and AttorneyGeneral Eric Holder worked before joining the JusticeDepartment.
Breuer could also join Jenner & Block, which is home toother alumni from the Obama administration and recently lost itstop white-collar defense lawyer when Andrew Weismann joined theFBI as its general counsel.
BP (BP.)
HSBC Holdings (HSBA)