Next Up: Letitia James

New York Attorney General Letitia James may be next in the line of President Trump’s political enemies to be prosecuted by the Justice Department. The likely basis of the indictment, should it arrive? Helping her niece buy a starter home.

That’s an oversimplification of the charges James could end up facing—but the president doesn’t seem to care much about the details anyway. “What about Comey, Adam “Shifty” Schiff, Leticia [sic]???” Trump asked in a Truth Social post addressed to Attorney General Pam Bondi—whom he simply called “Pam”—late last month. “They’re all guilty as hell, but nothing is going to be done….JUSTICE MUST BE SERVED, NOW!!!”

Trump’s handpicked lawyer Lindsey Halligan granted his wish within the week by securing an indictment against former FBI Director James Comey—after her predecessor as U.S. attorney for the Eastern District of Virginia, Erik Siebert, was forced out for declining to do so. There is little reason to think Halligan won’t also cooperate when it comes to James, whom Siebert declined to prosecute as well. After all, Trump said following the Comey indictment on Friday, “There’ll be others.”

The Comey and James cases both smack of retribution, but the flavor differs. Trump is targeting Comey for actions the former FBI director took in the context of his job. He’s targeting James, by contrast, for her conduct as a private citizen, much of it from before she was even the attorney general of New York. As attorney general, James sued Trump and his company for civil fraud—specifically, for inflating his properties’ values in documents submitted to lenders. Now, as president, Trump is directing his Justice Department to pursue James for a mirror violation: alleged mortgage fraud.

This reflects Trump’s modus operandi of responding to perceived offenses against him not just tit for tat, but tat for tat. He treats others the exact same way he claims they’ve mistreated him. She sued the Trump Organization alleging that it persistently valued his Fifth Avenue triplex as if it were 30,000 square feet when it was really 10,996 square feet. In return, the Justice Department is contemplating a case against her for having signed a form with a trivial error on it. 

The Charges

The investigation of James began nearly six months ago—starting in the spring, when Federal Housing Finance Agency Director Bill Pulte sent a criminal referral letter to the Justice Department alleging that James might have violated the wire fraud statute (18 U.S.C. § 1343), the mail fraud statute (8 U.S.C. § 1341), the bank fraud law (18 U.S.C. § 1344), and a law against false statements to a financial institution (18 U.S.C. § 1014) when she applied for mortgages in Virginia and New York. To secure a conviction on any of these counts, prosecutors would have to prove that James knowingly made a false statement that was intended to deceive as well as either intended, or tending, to influence the decision of a bank.

The criminal referral letter points to three separate properties: in Norfolk, Va.; Brooklyn, N.Y.; and Jamaica, N.Y. (a neighborhood in the borough of Queens).

Norfolk, Va.

The Norfolk property will almost certainly be at the center of any case brought against James in the Eastern District of Virginia. The charge here would be similar to those leveled against Federal Reserve Governor Lisa Cook: designating a property as her primary residence in a loan application when she already possessed a primary residence elsewhere—a crime known as owner occupancy fraud. 

At the crux of the allegation is a 2023 power of attorney James signed enabling a third party to settle on a home on her behalf. The two-page document includes the statement, “I HEREBY DECLARE that I intend to occupy this property as my principal residence.”

The allegation against James is twofold. First, the criminal referral letter maintains that James falsely stated that she intended to reside primarily in Norfolk. Second, Pulte argues, if she had made her home there, that wouldn’t have been legal either, because her role at the time as N.Y. attorney general required her to reside in the state she represents.

Neither part of the accusation bears scrutiny. James did not actually reside in Norfolk, nor is it clear that she ever pretended to. The referral declines to mention that the third party granted the power of attorney was James’s niece. James, according to her legal representation, assisted with the down-payment and co-signed the mortgage documents to help secure the loan, as many a parent has done for a child buying their first home.

James did incorrectly indicate on the power of attorney form that she would occupy the property as her principal residence. That may have been an error, or it may have been deliberate. But if it was deliberate, there’s no explaining why, in emails with the mortgage loan broker, she made her actual intentions capital-letters clear: “This property will NOT be my primary residence. It will be Shamice’s primary residence.” A loan application filed after the inaccurate power of attorney reflects this reality; the broker, in an email of his own, confirms it. How do prosecutors expect to prove that James made her false statement knowingly, much less that she intended to deceive a bank when, in these communications, she so evidently told the truth?

The only other supporting document Pulte refers to is a Virginia deed of trust, a standardized Fannie Mae/Freddie Mac form describing a borrower’s obligations under a loan. Pulte suggests that by signing the form, James reaffirmed that the Norfolk home would be her primary residence; the relevant section—labeled “Occupancy”—-does require that the borrower “occupy, establish and use the Property as Borrower’s principal residence within 60 days.” But the form is co-signed by James’s niece, presumably satisfying that requirement.

This highlights another problem for a potential prosecution: James may not have been applying for a loan for her primary residence, but she was applying for a loan for a primary residence, for her niece. Even if she had intentionally misled a mortgage broker, the distinction between co-borrowing for a primary residence for herself and co-borrowing for a primary residence for the other borrower—as opposed to, say, the distinction between borrowing for a primary residence and for a secondary one—would almost certainly not have led to a meaningful difference in rate.

The false statement in the power of attorney, in other words, would have been unlikely to influence the bank’s decision to provide James the loan at the agreed-upon rate, and prosecutors would struggle to show that was her intent.

Perhaps becoming desperate, prosecutors have reportedly also probed whether a separate Virginia property of James’s was described as both a “second home” and an “investment property.” This separate count could, remarkably, be even muddier than the Norfolk question: The Fannie Mae guidelines on the subject, ABC News reports, are vague, and senior DOJ leadership is skeptical.

Brooklyn, N.Y.

The only response the Justice Department has so far given to James’s legal team’s rebuttal of the criminal referral is a letter from Ed Martin, the associate deputy attorney general also endowed with the titles of special attorney for mortgage fraud and director of the Weaponization Working Group. (Martin also currently serves as the U.S. pardon attorney, though that is less relevant here.)

Writing to James’s attorney Abbe Lowell—and at one point appending an extra syllable to the middle of his target’s name: “Letitita”—Martin claimed that James would “best serve the ‘good of the state and the nation’ by resigning from office to address the issues in the referral.” The letter, replete with indignant rhetoric, lacked specifics about any of the issues raised above. But Martin seems particularly interested in James’s home in Brooklyn: Wearing a trench coat in the style of TV detective Lieutenant Columbo despite the August heat, he posed this summer for a New York Post photographer outside the property.

This home was the subject of the second complaint in the criminal referral, and it’s possible that Martin—assigned to oversee the James investigation by Attorney General Pam Bondi—will attempt to muscle through a related indictment.

The allegation regarding the Brooklyn property, where James has lived since 2001, revolves around the number of units in the building: four, according to James’s mortgage application, and five, according to a certificate of occupancy filed by a previous owner. The referral argues that, on false pretenses, James secured a loan only available for buildings with four residential units or fewer and that she repeated this tactic when she applied for a federal mortgage assistance program.

But it is far from clear that James actually misrepresented the number of units in the building. The home—-which has been used over the years by James and her family and friends—has “functioned as a four-person property” for all the time she has lived there, James’s attorneys argue, without the fifth basement unit listed in the occupancy certificate. New York City’s financial department appears to have accepted that classification in several years of tax documents.

The city’s housing department seems to agree. The New York Times reports that anonymous complaints about the property began pouring in to the New York City Department of Buildings around the time James’s successful lawsuit against Trump and the Trump Organization went to trial. Several of those complaints involved the number of units, but none resulted in a penalty.  On the contrary, the housing department called the discrepancy a “minor error.” (James was, however, issued a ticket for the installation of an illegally high fence.) 

Jamaica, N.Y.

The final matter mentioned in the criminal referral against James involves less her own purported misconduct than the mistakes of a dead man. 

When James’s now-deceased father was purchasing a home in the Jamaica neighborhood of Queens—with his daughter as a co-signer on the mortgage—both he and James signed a form misclassifying them as spouses. But a property deed notarized on the same date correctly described their relationship as father and daughter. Also, this happened 42 years ago.

These events are presumably included to demonstrate a pattern of dishonesty in James’s home-buying history. But it’s fair to say they show something else too: the allegations against James of deliberate wrongdoing seem to all be based on one or two documents, cherry-picked from a larger collection of documents that contradict them.

It seems wholly unlikely that a prosecutor could reasonably expect to secure a conviction on any of the charges included in the criminal referral— which explains why, after interviewing and presenting to the grand jury witnesses from insurers to underwriters to realtors to James’s niece herself, the Eastern District team didn’t find evidence they felt was sufficient to prove that James knowingly made a false statement intended to influence a bank. 

But let’s assume for a moment that prosecutors have James dead to rights on one or more of these charges. Even then, this is not the kind of mortgage fraud case federal prosecutors normally bring. U.S. attorneys offices typically prosecute mortgage fraud cases to nab big-time swindlers attempting to trick banks into six- to eight-figure losses. If Letitia James had committed mortgage fraud, her efforts would have yielded her only thousands of dollars—tens of thousands at most.

The only world in which James’s activities would merit this level of attention is the political one.

And that is precisely the point.