Donald Trump critic Letitia James pleads not guilty to mortgage fraud as political retribution claims erupt

New York Attorney-General Letitia James, a longtime critic of US President Donald Trump, has pleaded not guilty in federal court to charges related to allegedly lying on mortgage documents.

Ms James, a Democrat who in 2024 secured a $US450 million ($A693 million) civil fraud judgement against Mr Trump, is one of three perceived enemies that the Republican president’s administration has brought criminal charges against in the past month, along with former FBI Director Ms James Comey and former National Security Adviser John Bolton.

All three have denied wrongdoing.

Appearing before a federal judge in Norfolk, Virginia, Ms James said: “Not guilty, judge, to both counts.”

A trial set was set for January 26.

Outside the federal courthouse, supporters of Ms James gathered with signs where they chanted: “Hey hey! Ho ho! Let Letitia James go!” and “This is what democracy looks like”.

In a fiery speech, a defiant Ms James thanked the crowd for their support after she exited the courthouse.

“This is not about me,” she said.

“This is about all of us. About a justice system that has been weaponised. A justice system that has been used as a tool of revenge.

“So there’s no fear today,” she said, as the crowd chanted back: “No fear!”

“I believe justice will rain down like water and righteousness like a mighty stream,” Ms James said.

Mr Trump has promised to seek retribution against people he alleges used the justice system against him in an effort to prevent him from returning to power.

He pressured Attorney-General Pam Bondi to speed up the action, and replaced the prior US attorney overseeing the Ms James and Comey cases with a loyalist after that lead prosecutor expressed concerns with the strength of the evidence in both matters.

Two other Mr Trump rivals - Democratic Senator Adam Schiff and Federal Reserve Board Governor Lisa Cook - remain under criminal investigation and have also denied wrongdoing.

More than half of Americans, including about one in three Republicans, believe Mr Trump is using federal law enforcement to target his enemies, according to a Reuters/Ipsos poll this month.

Ms James last year won a $US454.2 million ($A699 million) penalty against Mr Trump after a judge found he fraudulently overstated his net worth to dupe lenders.

A New York state appeals court in August threw out the penalty, which had grown to more than $US500 million ($A770 million) with interest, but upheld the trial judge’s finding that Mr Trump was liable for fraud.

Both Mr Trump’s and Ms James’s offices are appealing to the state’s highest court.

A source familiar with Mr Trump’s thinking said that Mr Trump’s anger towards Ms James is particularly acute because of the challenges he faced when he struggled to secure a bond to cover the judgment, putting him at risk of having his assets seized.

The charges against Ms James focused on a property that she bought in Norfolk, Virginia, in 2020 for around $US137,000 ($A210,900).

It is alleged she told the bank she would occupy the residence as a second home, when she actually used it as an investment property. This alleged misrepresentation allowed her to receive a favourable interest rate that saved her nearly $US19,000 ($A29,250) over the life of the loan, the indictment says.

Ms James faces two criminal counts, bank fraud and making a false statement to a financial institution.