FBI Launches Probe Into NY AG Letitia James Over Mortgage Fraud Claims

The FBI has opened a criminal investigation into New York Attorney General Letitia James over allegations of mortgage fraud, multiple media outlets reported Thursday. The probe, being conducted by the FBI’s Albany field office, follows a criminal referral from the Federal Housing Finance Agency (FHFA) last month alleging James falsified documents to secure favorable loan terms, according to Reuters.

The investigation marks a dramatic escalation in tensions between President Trump and James, who successfully sued him for fraud last year, resulting in a $354 million judgment that has since grown to over $500 million with interest. Legal observers note the timing raises questions about potential political motivation behind the probe.

Virginia Property at Center of Investigation

Federal investigators are examining a 2023 real estate transaction in which James co-signed a mortgage for her niece’s home in Norfolk, Virginia. FHFA Director William Pulte claims James falsely declared the Virginia property as her “principal residence” despite being required to maintain New York residency as the state’s attorney general, according to Newsweek.

James’ attorney, Abbe Lowell, has vigorously disputed this characterization, stating that James clearly informed her mortgage broker the property “WILL NOT be my primary residence” and that she was properly documented as a “non-occupying co-borrower” on loan applications. The power-of-attorney form containing the residence declaration was “mistakenly stated,” Lowell claims.

Additional Allegations Under Scrutiny

The investigation also encompasses allegations regarding a Brooklyn property James has owned since 2001. Pulte claims James misrepresented the building as having four residential units instead of five to secure more favorable loan terms. The federal referral additionally references a 1983 mortgage document listing James and her father as “husband and wife,” according to Fox News.

James’ legal team has responded that the Brooklyn property indeed has four units, not five, as confirmed by multiple city records, and has characterized Pulte’s evidence as “cherry-picked” and misleading. Lowell has submitted documentation to the Justice Department that he says disproves all allegations.

Trump Administration’s Role Questioned

The decision by Attorney General Pam Bondi to direct the investigation to the Northern District of New York in Albany rather than to prosecutors in New York City, where James’ properties are located, has raised eyebrows among legal observers. Some transactions potentially fall outside federal statutes of limitations, further complicating the case.

New York Governor Kathy Hochul has described the investigation as part of President Trump’s broader campaign of retribution, noting that “he said he was going to go after his enemies… and he’s finally gotten down to maybe the J’s on his list,” as reported by CBS New York.

Legal and Political Implications

James has hired prominent defense attorney Abbe Lowell, who has previously represented Ivanka Trump, Jared Kushner, and Hunter Biden. In a strongly worded letter to the Justice Department, Lowell called the investigation “the latest act of improper political retribution” and urged officials to close the matter promptly.

When asked about James this week, President Trump told reporters in the Oval Office: “She’s a disaster for New York. She’s a horrible, horrible human being. And I think she’s a total crook,” while adding that Attorney General Bondi would “have to do what she wants,” according to Newsweek.