Prosecutor conceded lack of criminal evidence in Federal Reserve investigation, transcript shows

Newly released court records indicate the Justice Department's investigation of a $2.5 billion renovation project at the Federal Reserve didn’t find any evidence of a crime before a judge quashed government subpoenas, dealing a severe blow to the probe

WASHINGTON -- The Justice Department's investigation of a $2.5 billion renovation project at the Federal Reserve didn't find any evidence of a crime, a federal prosecutor privately conceded under questioning by a skeptical judge earlier this month, according to a transcript of the sealed hearing.

That admission by Assistant U.S. Attorney Andrew Massucco came during a March 3 hearing that was closed to the public, the transcript shows. Eight days later, Chief Judge James Boasberg quashed government subpoenas issued to the Federal Reserve, dealing a severe blow to the government's investigation.

In his March 11 ruling, Boasberg said the government had produced “essentially zero evidence” to suspect Fed Chair Jerome Powell of a crime. The judge, who was nominated to the bench by Democratic President Barack Obama, also described prosecutors' justification for the subpoenas as “thin and unsubstantiated."

During the earlier hearing, Boasberg asked the prosecutor from U.S. Attorney Jeanine Pirro's office to specify any evidence of fraud or criminal misconduct related to Powell's testimony about the renovation project or the construction work itself.

“So what false statements did (Powell) make before Congress?” the judge asked Massucco, according to the transcript.