Letitia James: Justice Department indicts NY attorney general who brought fraud case against Trump

The Justice Department obtained an indictment against New York Attorney General Letitia James on Thursday, accusing her of committing mortgage fraud when she purchased a property in Virginia.

The indictment on one count of bank fraud and one of making a false statement makes Ms James the second of President Donald Trump’s political foes to be charged in the Eastern District of Virginia since Trump pushed out the top prosecutor there and appointed a close ally, Lindsey Halligan, to replace him. Ms Halligan, who had no previous experience as a prosecutor, obtained an indictment two weeks ago against former FBI director James B. Comey on charges of making a false statement to Congress. He has pleaded not guilty.

Ms Halligan presented the case against Ms James to a grand jury in Alexandria. It is unusual for a politically appointed top US attorney to present a case herself, suggesting that the office struggled to find a career attorney willing to take on the assignment.

A senior career attorney in the office indicated to her staff in recent days that she believed the case was weak and did not want to present it to a grand jury, according to two people familiar with the internal conversations who spoke on the condition of anonymity out of fear of retaliation. That attorney had also worked to insulate her subordinates from the case so that they, too, would not have to present the case, those people said.

The previous US attorney for the Eastern District of Virginia, Erik Siebert, was ousted last month because he believed there was insufficient evidence to present the cases against Mr Comey and Ms James to grand juries.

In a statement about the case, Ms Halligan said: “No one is above the law. The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public’s trust.”

“The facts and the law in this case are clear, and we will continue following them to ensure that justice is served,” she added.

Ms James said in a post on X that the case “is nothing more than a continuation of the President’s desperate weaponization of our justice system.”

“I am not fearful - I am fearless. We will fight these baseless charges aggressively, and my office will continue to fiercely protect New Yorkers and their rights.”

US District Judge Jamar K. Walker, a Biden judicial appointee, was chosen by random selection to handle the case. Ms James, who was not arrested, was summoned to appear in court in Norfolk on October 24.

Mr Trump has long referred to Ms James as a political foe. In 2022, she brought a civil fraud case against Mr Trump and his real estate empire which, two years later, resulted in a judge ordering Mr Trump and his company to pay more than $US350 million in fines and interest. In August, a New York appeals court voided the fine but left intact the judge’s finding that Mr Trump and others in his company had committed fraud.

The case against Ms James stems from a criminal referral sent to the Justice Department in April by William J. Pulte, the head of the Federal Housing Finance Agency. Mr Pulte, a Trump ally, has also made similar mortgage-fraud allegations against Senator Adam Schiff (D-California) and Federal Reserve governor Lisa Cook.

Mr Pulte alleged that Ms James lied on loan documents for a house she purchased in Norfolk in 2023. In paperwork related to that purchase, she said the home would be her primary residence even as she served as attorney general in New York. That constituted an effort to fraudulently obtain “more favourable loan terms,” Mr Pulte said.

Ms James’s attorney has described her statements as honest mistakes and said Ms James has presented evidence showing that she purchased the home for a niece and had not intended to improperly secure a better mortgage rate by declaring it her primary residence.

Prosecutors had called Ms James’s niece to appear before a grand jury as part of the investigation, according to people familiar with the conversations. Those people said the niece gave testimony that would bolster Ms James’s case that she did not commit fraud.

The indictment, however, appears to refer to a separate Virginia property purchased in 2020.

The indictment alleges that while Ms James was purchasing the home, she signed a standard document known as a “second home rider” in which she agreed to various rules to obtain more favourable loan terms.

Those included a provision that she would keep the property as a secondary residence for her own use unless the lender agreed otherwise in writing.

Instead, the indictment states, Ms James rented the property to a family of three. Prosecutors accused Ms James of saving nearly $19,000 in mortgage-related costs and fees through that deception.

The mortgage fraud allegations against Ms James, Senator Schiff and Ms Cook are being overseen by Ed Martin, the President’s failed nominee to be the top prosecutor in DC. Mr Martin is now in a senior role at Justice Department headquarters. His official account on X refers to him as “Special Attorney addressing mortgage fraud by public officials.” He is close with the President and frequently speaks with him, according to multiple people familiar with their relationship.

Mr Martin has been meeting with investigators in Virginia, Maryland and Georgia as he works to build the cases.

The accusations against Senator Schiff and Mr Cook have not been presented to a grand jury. Both have denied wrongdoing.

Mr Martin’s actions have, at times, drawn ire from Deputy Attorney General Todd Blanche, who has grown frustrated with Mr Martin’s handling of the investigations, according to one person familiar with the matter who spoke on the condition of anonymity to discuss internal deliberations.

In addition to the mortgage-fraud case, the Justice Department has also issued at least one subpoena to Ms James in a separate federal investigation, which is being run out of New York. That investigation appears to focus on whether Ms James violated Mr Trump’s rights when she brought the civil fraud case against him.

A second subpoena to Ms James’s office indicated that the Justice Department is also looking into Ms James’s high-profile litigation against the National Rifle Association, which led to court-mandated reforms of the group, the people said.

After Ms James was charged Thursday, Mr Martin posted on social media: “Promises made, Promises kept.”

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