JPMorgan deal 'preposterous': Former prosectutor

Jamie Dimon

JPMorgan's tentative $13 billion settlement with the Justice Department, the New York attorney general, and the Federal Housing Finance Agency over financial crisis-era mortgage loans is a "terrible deal," former federal and state prosecutor Jacob Frenkel told CNBC on Monday.

"This number is absolutely preposterous," he said in a " Squawk Box " interview. "It's almost as if what we're getting out of federal regulators ... is a roulette wheel or some kind of jackpot, how much can you jack up the fine."

(Read more: JPMorgan close to $13 billion mortgage settlement )

Much of the tentative deal would settle allegations of sales of shoddy mortgage securities by Bear Stearns and Washington Mutual-companies that JPMorgan purchased during the 2008 financial crisis at the behest of the government and the Federal Reserve.

"In essence, [the bank] is being penalized for having taken over Bear Stearns and WaMu," said Frenkel, a former Securities and Exchange Commission lawyer who now heads corporate litigation as a partner at Shulman Rogers.

(Read more: Buffett on JPMorgan: Jamie Dimon will survive just fine )

"For JPMorgan writing a check of this amount, they should have closure on criminal investigation," he added. "They are not getting a nonprosecution agreement," so the bank could possibility of additional criminal investigation or lawsuits down the road.

-By CNBC's Matthew J. Belvedere . Follow him on Twitter @Matt_SquawkCNBC .

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