Just minutes ago, New York Attorney General Letitia James faced allegations of mortgage fraud, prompting a federal investigation by the FBI and the U.S. Department of Justice (DOJ). The probe, which involves potential charges of bank fraud, mail fraud, wire fraud, and making false statements, is now active with grand jury proceedings underway in both Virginia and Maryland. These developments mark a significant escalation in scrutiny of James, a prominent figure known for her legal battles against former President Donald Trump.

The investigation stems from a criminal referral by Federal Housing Finance Agency (FHFA) Director William J. Pulte, who alleged in April 2025 that James falsified records to secure favorable loan terms on properties in Norfolk, Virginia, and Brooklyn, New York. Specifically, Pulte claimed that in 2023, James misrepresented a Virginia property as her primary residence to obtain lower mortgage rates, despite her legal obligation to maintain residency in New York as the state’s Attorney General. Additionally, he accused her of falsely declaring a Brooklyn property as having four units instead of five in 2021 to qualify for a loan program with a four-unit maximum, and listing her father as her spouse on mortgage documents in 1983 and 2000. These allegations, if substantiated, could lead to serious federal charges, including wire fraud and bank fraud, each carrying potential penalties of up to 30 years in prison.

The FBI’s Public Corruption Division, in coordination with the U.S. Attorney’s Office in Albany, New York, is leading the investigation, with grand juries in the Eastern District of Virginia and Maryland issuing subpoenas to gather evidence. Sources indicate that the probe is examining whether James misused her public office or involved senior aides in her personal financial transactions, raising ethical concerns about the use of official resources. While no charges have been filed, the involvement of grand juries suggests the investigation is advancing, though such cases often take months due to the complexity of financial records involved.

James has denied the allegations, calling them “baseless” and politically motivated. Her attorney, Abbe Lowell, has argued that the accusations are part of a retaliatory campaign by the Trump administration, pointing to James’s high-profile civil fraud case against Trump, which resulted in a $454 million judgment in 2024, now exceeding $500 million with interest. Lowell contends that any errors in mortgage documents were clerical and lacked intent to defraud, citing documents indicating the Virginia property was intended for James’s niece and that the Brooklyn property’s unit count was accurately represented elsewhere. He has also criticized the DOJ for what he describes as “weaponization” of federal authority, a claim echoed by James in a recent NY1 interview where she labeled the probe a “revenge tour” by Trump.

The allegations have sparked intense public and political debate. Critics, including conservative figures like Congresswoman Elise Stefanik, argue that James’s alleged actions mirror the financial misconduct she accused Trump of, highlighting what they call her hypocrisy. Posts on X reflect similar sentiments, with users alleging James committed clear mortgage fraud and questioning her integrity. Conversely, supporters argue the investigation is a politically driven attack aimed at undermining James’s efforts to hold powerful figures accountable. Legal experts note that proving intent is critical in fraud cases, and statutes of limitations may complicate prosecution, particularly for older allegations like those from 1983.

The timing of the investigation coincides with James’s ongoing legal efforts, including a recent lawsuit alongside New York Governor Kathy Hochul against the Trump administration over tariff policies. As the probe unfolds, it could impact the operations of the New York Attorney General’s Office, which is currently handling major cases against tech companies and environmental polluters. James has indicated she will use a private legal defense fund and possibly state funds to cover her legal expenses, a move that has drawn further scrutiny.

The controversy raises broader questions about the politicization of justice, with some analysts warning that the probe could have a chilling effect on state officials challenging federal authority. As grand jury proceedings continue, the outcome of this investigation could significantly affect James’s career and the public’s trust in New York’s legal institutions.