Feds accuse Trump adversary Letitia James of loan fraud

New York Attorney General and long-time legal adversary to Donald Trump Letitia James faces a federal grand jury investigation involving her role in multiple mortgage transactions, according to several news sources. 

The investigation, which is being led by the Department of Justice and the FBI, revolves around fraud allegations made by Federal Housing Finance Agency Director Bill Pulte in a letter last month, claiming James falsified documents and records in Virginia and New York State. News of the grand jury was previously reported by outlets, including The Washington Post and CBS. 

In a criminal referral addressed to Attorney General Pam Bondi, Pulte claimed James affirmed that a 2023 property purchased in Norfolk, Virginia, would be her primary address, despite requirements that she live in New York as an elected official. A primary residence would qualify for more loans than if it was being used as a secondary or investment property. 

Pulte also pointed to a 2001 multifamily transaction in Brooklyn, New York, which James said contained four separate dwellings. The FHFA director alleged the property had five units available, and James intentionally misrepresented its size at the time of purchase to qualify for conforming mortgage rates.   

Going back further, the FHFA director also claimed James and her father signed mortgage documents in 1983 as husband and wife, which would have given them more favorable terms.  

If allegations are proven correct, James could face civil fraud charges.  

The New York attorney general responds

In interviews conducted after Pulte made his initial claims, New York's attorney general called the accusations "baseless" and labeled Pulte's actions as political retaliation following her successful prosecution against President Trump in a property fraud case. Last year, a New York judge ordered Trump to pay a fine totaling more than $500 million, including accrued interest, after being found guilty of falsifying valuations and his own net worth to obtain favorable deal terms. The case is currently under appeal.

In late April, James hired criminal defense attorney Abbe Lowell as counsel to help fight accusations. Previously a partner at Winston & Strawn, Lowell served as co-chair of its white collar, regulatory and investigations practice group and previously defended Hunter Biden against gun and tax charges. Past clients also include Ivanka Trump and Jared Kushner, the current president's daughter and son-in-law.

In a letter sent to Bondi, Lowell said Pulte was engaged in carrying out the "all-too-familiar playbook of the president" to praise the judicial system when he wins and criticize it when he loses, attacking attorneys and judges involved. 

In the Virginia case, Lowell accused Pulte of misstating James' intent based on one improperly completed document in a loan file consisting of hundreds of pages.

"Director Pulte cherry-picked an August 17, 2023 power of attorney that mistakenly stated the property to be Ms. James' principal residence and at the same time absolutely ignored her very clear and all caps statement two weeks earlier to the mortgage loan broker that "[t]his property WILL NOT be my primary residence," Lowell wrote.  

In the 2001 charge, Lowell pointed to a loan-modification application and New York City public records confirming the Brooklyn property was classified as a four-unit dwelling.

"Look at the entire file of each event, the haste in which one document has one line filled out in error, and the clear fact that, with the exception of attending school, Attorney General James has only lived in Brooklyn, and the "criminal referral" becomes three pages of stale, threadbare allegations with no reason to proceed," the  letter stated. 

After taking on James' case, James' attorney opened up a new practice, Lowell & Associates, to help defend individuals targeted by President Trump. 

Pulte's fraud focus

Since Pulte took over as FHFA director, rooting out fraud at the agency has emerged as a priority, serving as motivation for many of his moves and a frequent theme of his communications, particularly in social media posts.  

In announcing layoffs at Fannie Mae last month, Pulte alluded to unethical behavior of former employees but provided no clarification on exact numbers or the type of infractions involved.

Pulte also said he planned to open communications between Fannie Mae and Freddie Mac in an effort to combat fraud and introduced an email tip line for the public to  report possible instances.