New York Attorney General Letitia James, long known for targeting mortgage and bank fraud, now finds herself accused of the very type of deception she once prosecuted.
James, who built her career in part by exposing forged deeds and false loan applications in state court, was indicted Thursday by a federal grand jury in Virginia on one count each of bank fraud and making false statements to financial institutions. The indictment alleges that James misrepresented her Virginia home as her “principal residence” to obtain favorable mortgage terms — a misstatement prosecutors say saved her roughly $18,933 of “ill-gotten gains” over the life of the loan.
A prosecutor turned defendant
Over the past six years, James’s office has charged numerous defendants with falsifying documents to obtain mortgages and mislead banks. In one June 2019 Brooklyn case, prosecutors accused a couple of submitting fake pay stubs, tax returns, and bank statements to secure multiple loans. A July 2021 Harlem and Long Island case charged developer Joseph Makhani with forging deeds and falsifying records to get bank financing for properties he didn’t own outright. And in a Queens case this year, the first under New York’s new deed-theft statute, her office accused two men of using forged property transfers to obtain a $552,500 mortgage.
All of those cases revolved around a familiar theme: lying or misleading lenders for personal gain. Now, James herself faces the same kind of allegation in the indictment brought against her.
Former Republican Kentucky Attorney General Daniel Cameron, now CEO of the 1792 Exchange, said the parallels are striking. “It appears from what I’ve seen of the indictment that there were misrepresentations related to the application and securing of the loan,” Cameron told the Washington Examiner. “It appears pretty cut and dry. The check on all of this is that a grand jury — seated in Virginia, not exactly a hotbed of conservatism — found probable cause to indict.”
Cameron added that claims of political targeting overlook a basic point, which is that James’s own office has prosecuted nearly identical cases.
“Despite what Letitia James and her people are saying, it’s not an uncommon set of facts,” he said. “The best case in point is that in her own office, they’ve pursued indictments and prosecutions with similar fact patterns. The idea that this is just weaponization doesn’t square with reality.”
The mortgage fraud case explained
According to the indictment, James took out a $109,600 mortgage in August 2020 to buy a small house in Norfolk, Virginia, with the loan terms requiring that it be used as a secondary residence — not as a rental or investment property. Prosecutors say she never used the property herself and instead rented it out, benefiting from a lower interest rate and higher seller credit that would not have been available for an investment loan.
The indictment, signed by U.S. Attorney Lindsey Halligan, accuses James of committing “intentional, criminal acts and tremendous breaches of the public’s trust.” Halligan, a former personal lawyer to President Donald Trump, was appointed in the Eastern District of Virginia after Trump fired U.S. Attorney Erik Siebert, who reportedly refused to bring charges against James based on the available evidence.
If convicted, James faces a maximum of 30 years in prison on each count and a fine of up to $1 million — penalties heightened by Congress during the 1990s savings and loan crisis. Still, the dollar amount at issue is small, and experts note that federal prosecutors almost never pursue mortgage-fraud cases under $500,000. Only 38 people nationwide were sentenced for federal mortgage fraud last year, most involving large-scale schemes and sums.
James’s attorney Abbe Lowell has called the charges “baseless” and politically driven, saying they reflect the president’s “desire for revenge.” He emphasized that James continues to pay the mortgage and said the home was occupied by family members, not tenants.
A mirror of her business fraud case against Trump
The case against James in some ways mirrors, albeit at a smaller scale, the civil fraud case James brought against Trump, his family, and the Trump Organization. James accused Trump of inflating his assets to secure favorable financing and insurance terms. That case initially resulted in a half-billion-dollar penalty before a New York appellate court rolled most of it back earlier this year.
Where Trump was accused of exaggerating the value of skyscrapers and golf courses, James is now accused of overstating her own occupancy to obtain better mortgage rates — a small-scale version of the same legal theory.
After New York Supreme Court Judge Arthur Engoron ruled in favor of James’s civil case against Trump in February last year, James announced that Trump is “finally facing accountability for his lying, cheating, and staggering fraud. Because no matter how big, rich, or powerful you think you are, no one is above the law.” In August, an intermediate level state court tossed out the full fine against Trump, though it maintained Engoron’s finding that the company likely overvalued its assets. James is now appealing that decision.
Halligan on Thursday issued a brief yet similar comment in response to the indictment, saying that “No one is above the law.”
Will James move to dismiss the indictment?
The indictment against James comes just as similar political and constitutional issues play out in another case led by the same prosecutor, Halligan. At the arraignment of former FBI Director James Comey this week, Comey’s lawyer told the court he intends to file motions to dismiss that case on two grounds — that Halligan was unlawfully appointed and that her prosecution was vindictive and selective in violation of the Constitution.
James’s defense team has not yet said whether they will take the same approach. But her attorney Lowell suggested such motions could be forthcoming, vowing to “fight these charges in every process allowed in the law” and warning that “this case is driven by President Trump’s desire for revenge.”
Cameron said that while selective-prosecution claims are often raised in politically charged cases, they seldom succeed. “The Supreme Court has set a high bar when it comes to claims of vindictive or selective prosecution,” he said. “At the end of the day, the grand jury process itself serves as a check. You still have to present credible facts, and they did. That’s what gives this case legal standing.”
If Lowell pursues a dismissal motion, it will likely hinge on the same arguments surfacing in the Comey case: that Halligan, a Trump ally with no prior experience as a leading prosecutor, improperly weaponized her office against the president’s adversaries. Comey’s attorneys are also seeking to challenge the legality of Halligan’s appointment.
Disputed evidence and broader context
Previous attempts to link James to financial irregularities have largely fallen apart under scrutiny, though this indictment hinges un previously undisputed facts.
Earlier this year, Federal Housing Finance Agency Director Bill Pulte, a close Trump ally, conducted his own review of real estate filings involving political opponents of the president. In April, he referred James to the Justice Department over what he claimed were false statements tied to two different properties — including a different house in Norfolk purchased with her niece in 2023. Pulte alleged that James listed herself as the primary resident on loan paperwork for that home, despite not living there.
Within weeks, James’s attorney Abbe Lowell issued a detailed rebuttal, accusing Pulte of selectively highlighting one document while ignoring others that clearly named the niece as the intended occupant. Lowell, who also represented Hunter Biden during his federal firearms violation and tax evasion cases, said the referral “collapsed under basic fact-checking” once the full transaction file was reviewed.
Federal prosecutors ultimately declined to act on Pulte’s referral for that property. The 2020 Norfolk property now at the center of the indictment was not part of that earlier dispute and had not been raised in Lowell’s written defense.
NEW YORK ATTORNEY GENERAL LETITIA JAMES INDICTED ON BANK FRAUD CHARGE
Nonetheless, the current indictment introduces one new piece of evidence, which is a homeowners’ insurance application that allegedly identified the 2020 house as “owner-occupied” instead of a rental. Prosecutors say that discrepancy further supports their claim that James knowingly misled the lender about how the property would be used.
James is scheduled to appear in federal court in Norfolk on Oct. 24. If the case ultimately proceeds, jurors will have to decide whether the Empire State’s most prominent fraud prosecutor made the kind of misrepresentation she once condemned in others.