James Dimon, chairman and CEO of JP Morgan Chase & Co., speaks at a conference, Tuesday, October 27, 2009 in New York. (AP Photo/Mark Lennihan)

JPMorgan Chase, the star of mega-banks, is up against the wall at the Justice Department, trying to settle its myriad crimes for $13 billion. That’s real money, even for a trillion-dollar bank. So this is progress. After years of scandalous indifference, the Obama administration appears to have found its backbone.

Better late than never, grumpy citizens can say. But that doesn’t settle the matter. Four years ago, Senator Ted Kaufman of Delaware crisply described the more fundamental problem posed by the wantonly reckless behemoths of Wall Street.

“People know that if they rob a bank they will go to jail,” Kaufman said. “Bankers should know that if they rob people they will go to jail too.” Can we hear an amen on that? Not yet. But the complaint Kaufman voiced repeatedly is now on the table. “At the end of the day,” the senator warned, “This is a test of whether we have one justice system in this country or two. If we do not treat a Wall Street firm that defrauded investors of millions of dollars the same way we treat someone who stole $500 from a cash register, then how can we expect our citizens to have any faith in the rule of law?” (See my piece from April 2011, “How Wall Street Crooks Get Out of Jail Free.”)

Attorney General Eric Holder was stung, his reputation severely damaged. His lieutenants in the criminal division explained repeatedly that while the megacrimes seemed obvious, it is fiendishly difficult to locate the people in a huge, complex financial organization who can be successfully prosecuted as criminals. The popular anger did not go away, however, because in JPMorgan’s case the outrages only got larger and more obvious.

So here we are four years later and leading newspapers report that Justice is on the brink of a record-setting settlement—$13 billion. Jamie Dimon, JPMorgan CEO and formerly the president’s favorite banker, has personally negotiated the terms with the attorney general. The Morgan bank started with an offer of $1 billion and quickly raised it to $4 billion. Holder’s office kept saying, no, not enough. According to The New York Times, seven federal agencies are investigating the bank, plus state banking regulators and a couple of foreign governments.

The offenses include an all-star list of duped victims—of mortgage fraud against home-buyers, investor fraud against people and pension funds that purchased the rotten mortgage securities and defrauded the federal agencies (Fannie Mae and Freddie Mac) that bought the mortgage bonds and applied federal guarantees to them. Nevertheless, if there is no identifiable “criminal” who can be sent to jail, the case could be treated as merely another bureaucratic crime and adjudicated with lots of cash, a very familiar exercise in this era of high-flying capitalist buccaneers and bandits.

But here is the exciting and suspenseful element in this story. Eric Holder and his prosecutors have so far refused to settle on such amicable terms. Federal prosecutors in Sacramento believe they have established the personal linkage—who ordered the dirty deals, who carried them out—that could support criminal indictments of individuals or against the corporate “person” known as JPMorgan Chase. That would be truly unprecedented—a “game changer” in Wall Street/Washington parlance—and with threatening potential for the defendant bank.

In the negotiations, Holder has refused to give Dimon what he seems to want most—an agreement to drop the criminal charge and settle for bigger money instead. That might weaken the storm of private lawsuits already filed by the victims of JPMorgan’s fraudulent profiteering. The star banker kept raising his bid. The AG kept saying no way. Americans should stay tuned and maybe send fan mail to the Justice Department, urging the prosecutors to hang tough.

But you can’t send a bank to jail, can you? No, but you could place it under court supervision and empower a federal judge to order and supervise internal reforms in the megabank, perhaps even downsizing. Does that sound too harsh? If the feds can do this to a corrupt labor union like the Teamsters, why not to an outlaw bank like JPMorgan?

Last week, Congress struck a blow to Monsanto that few noticed.