New York Attorney General Letitia James’ indictment Thursday was the second major achievement in the aggressive pressure campaign by the White House to prosecute President Donald Trump’s political foes.
The five-page indictment accuses James of making false statements on a loan application to receive favorable terms, allegations that she denies. She is scheduled to appear in court on October 24.
The Justice Department’s formal investigation into James started earlier this year after the president called her a “wacky crook,” and hit a boiling point last month when Trump publicly called on Attorney General Pam Bondi to prosecute her, saying she and others like California Democratic Sen. Adam Schiff are “guilty as hell.”
Trump’s push for the case has critics worried the Justice Department is increasingly under the president’s personal command, as he vociferously challenges prosecutors to target his opponents while turning away from cases that may not align with his interests.
The indictment
The allegations against James focus on a mortgage agreement the New York Democrat signed in 2020 to purchase a house in Norfolk, Virginia.
James allegedly stated in loan documents that she would use the property as her secondary residence – a claim that prosecutors say won her favorable loan terms but was in fact a lie as she instead rented it out to a family.
Her misrepresentation violated her mortgage agreement, prosecutors say, which barred James from renting out the property.
Prosecutors allege James improperly saved $18,933 because the interest rate on a mortgage for a second home is lower than interest rates on a loan for an investment property. The lower interest rate and another credit, they allege, account for the savings.
The first count James faces, bank fraud, charges her with scheming to defraud two financial institutions: OVM Financial, which helped James apply for the loan, and First Savings Bank, which was assigned to the loan.
The second count charges James with lying to OVM Financial about her plans to rent the house.
A person familiar with the James property told CNN that members of her family are living at the home. The person added there is no rental agreement, James never relinquished control of the property and she has made all the mortgage payments.
She faces up to 30 years in prison if convicted.
James will make her first appearance in court later this month, during which she will be presented with the charges against her. Prosecutors could ask the judge assigned to oversee the case to impose conditions for her release, though such conditions are not common when defendants aren’t accused of violent crimes or at risk of fleeing.
As the case progresses, James’ attorneys will have the opportunity to challenge the prosecution before it goes to trial.
Her attorneys have not yet said what motions they plan to file, but have indicated that they see the indictment as political in nature and said in a statement to CNN that the case “is driven by President Trump’s desire for revenge.”
How we got here
The probe into James began in April when Bill Pulte, the director of the Federal Housing Finance Agency, sent a criminal referral to the Justice Department over claims that she may have engaged in mortgage fraud when purchasing two different homes – a Brooklyn brownstone she purchased decades ago and the house in Norfolk in 2023.
And while prosecutors investigated Pulte’s allegations on the two additional homes, Thursday’s indictment made clear they were zeroing in on a third property, another house in Norfolk, that she purchased in 2020.
That house, which is at issue in the indictment, was not included in Pulte’s referral.
James’ attorneys were caught off guard when they learned that the charges in the indictment did not focus on the two properties that Pulte had included in his referral, sources familiar with their reaction told CNN.
They had previously pushed back on Pulte’s claims, even passing documents along to the DOJ they said refute the “threadbare” accusations.
Prosecutors for months investigated Pulte’s allegations – one of whom, special prosecutor Ed Martin, even posed for pictures in front of her Brooklyn home. The prosecutors working on the case concluded there was not enough evidence to charge her with intentionally lying on her loan paperwork, CNN reported.
In fact, the top prosecutor in the Eastern District of Virginia was pushed out of his role because of his resistance from Pulte, Martin and the White House to bring any charges.
His replacement, former Trump aide Lindsey Halligan presented the case to the grand jury soon after accepting the job. Halligan previously secured a grand jury indictment into another Trump enemy, former FBI Director James Comey. Comey has pleaded not guilty.
According to sources, Halligan did not give Bondi or other DOJ leaders in Washington a heads-up about the timing of the James indictment.
James’ civil lawsuit against Trump
The president has publicly, and repeatedly, stated that he hopes those who prosecuted him should face the same justice system he did during and after his first term.
James campaigned for New York attorney general pledging she would investigate Trump’s real estate business, which she did. On the campaign trail in 2024, Trump peppered his speeches with criticisms of James saying she should be prosecuted.
The case against James seems to fill that desire – and mirrors the civil fraud case she brought in state court against him, his sons and business in 2022, in which she accused Trump of fraudulently inflated the value of his properties on his financial statements to get better rates from banks and insurers.
James’ alleged that Trump’s inflated property values were used to bolster his net worth and allowed him to qualify for a personal guarantee loan versus obtaining a commercial loan, which would carry a higher interest rate.
A New York judge found Trump liable for fraud. Trump is appealing.
After the James indictment was reported Thursday, Trump’s allies rushed to use another of James’ strategies against her: online messaging.
Within minutes, conservative figures were reposting years-old social media messages, including slogans that James wrote during the Trump case.
Halligan, the newly minted US attorney in Virginia’s eastern district, repeated one in her first public statement after securing the indictment: “No one is above the law.”
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