The FBI and the U.S. Attorney’s Office in Albany, New York, have launched a formal criminal investigation into New York Attorney General Letitia James, focusing on allegations of mortgage fraud. The probe stems from a referral by William Pulte, director of the Federal Housing Finance Agency (FHFA), sent to U.S. Attorney General Pam Bondi in April 2025. The allegations center on three main claims:
- Virginia Property (2023): James is accused of falsely claiming a Norfolk, Virginia, home as her primary residence to secure better mortgage rates, despite being a New York resident and serving as Attorney General, which requires her primary residence to be in New York. A power-of-attorney document signed by James allegedly declared the property as her principal residence, though her attorney, Abbe Lowell, claims this was a clerical error and that James clearly stated to the mortgage broker that the property was for her niece, Shamice Thompson-Hairston, not herself.
- Brooklyn Property (2001): Pulte alleges James misrepresented a five-unit Brooklyn brownstone as a four-unit property on mortgage and building permit applications to qualify for loans meant for smaller multifamily homes, which offer better interest rates. Lowell counters that updated records confirm the property has four units, and Pulte relied on an outdated 2001 certificate of occupancy.
- 1983 Mortgage Application: It’s claimed that James and her father signed mortgage documents listing them as husband and wife. Lowell argues this is a misinterpretation, as the 1983 deed clearly identifies James as her father’s daughter, and any error was insignificant. This allegation is considered less relevant due to statutes of limitations.
The investigation has escalated with a federal grand jury in the Eastern District of Virginia issuing subpoenas related to the Norfolk property. James denies the allegations, calling them “baseless” and politically motivated, particularly citing her legal battles with President Donald Trump, including a 2023 civil fraud case that resulted in a $450 million judgment against him. Her office accuses the Trump administration of weaponizing federal agencies for retribution. Lowell has provided documents to refute the claims and criticized Pulte for “cherry-picking” evidence.
FBI opens formal criminal probe into New York AG Letitia James over alleged mortgage fraud
— Steve Gruber (@stevegrubershow) May 8, 2025
The investigation, follows a request that the Justice Department investigate James, sent by Federal Housing Finance Agency Director William Pulte to the Justice Department last month.
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Critics, including Trump allies like Congresswoman Elise Stefanik, argue the allegations mirror the fraud James prosecuted Trump for, highlighting perceived hypocrisy. Legal experts note that proving intent is key to criminal charges like wire fraud, mail fraud, or bank fraud, and some suggest the allegations may not meet that threshold unless deliberate misrepresentation is proven. Others, like former prosecutor Neama Rahmani, point out potential legal issues under New York law, which could deem James’s office vacant if her residency is questioned, though this is speculative.
The investigation remains in early stages, with no charges filed. The Justice Department and FBI have declined to comment, and James’s office has not responded to recent inquiries. Public sentiment on X reflects polarized views, with some users calling for James’s prosecution and others dismissing the probe as retaliatory. The outcome depends on whether prosecutors find sufficient evidence of intentional fraud, and developments are expected in the coming weeks, including potential grand jury proceedings.