Federal prosecutors have hit New York Attorney General Letitia James with serious charges that could send her to prison for decades.
James is accused of falsifying loan documents to obtain a cheaper mortgage rate on a Virginia property she used as a rental, a move that prosecutors say constitutes bank fraud.
Court filings show James listed the Norfolk, Virginia home as an “investment” on her 2020 through 2023 financial disclosure forms while allegedly lying to her lender by claiming the same property would serve as her second home.
In 2024, she abruptly changed the property’s designation from “investment” to “real property” and boosted its listed value to between $150,000 and $250,000.
That change came one month after a criminal complaint was filed with the Justice Department, accusing her of falsifying records, as reported by the Conservative Brief.
The complaint was filed by Federal Housing Finance Agency Director William Pulte, who alleged James “misrepresented her intended use” of the property when applying for a $109,600 mortgage from OVM Financial.
Prosecutors say the loan, backed by Fannie Mae, required James to use the home as a secondary residence. It explicitly prohibited renting it out or allowing others to occupy the property.
“Despite these representations,” the indictment reads, “the Norfolk property was not occupied or used by James as a secondary residence and was instead used as a rental investment property.”
Federal authorities allege that by lying on her loan application, James secured a lower mortgage rate she otherwise wouldn’t have qualified for. That fraudulent advantage allegedly saved her nearly $19,000 over the life of the loan.
According to the Justice Department, James also lied on her homeowners insurance paperwork, falsely stating that the home would be “owner occupied.” On her federal taxes, however, she treated the same property as rental real estate.
Prosecutors say James reported “thousands of dollars in rents received” while claiming deductions tied to the property’s rental use. These conflicting statements formed the backbone of the federal case.
James has been charged with two felony counts: bank fraud and making false statements to a financial institution. If convicted, she faces up to 60 years in prison and fines totaling $2 million.
Her first court appearance in Virginia is set for Oct. 24.
Legal experts warn that her defense could cost millions. “I think all in, it’s probably going to be in the range of $5 to $10 million,” former prosecutor Neama Rahmani told the New York Post.
New York taxpayers will not foot the bill for her defense. Although the state set aside a $10 million fund for legal fees, James’ office has stated she will not use it.
Instead, she’s reportedly relying on the Democratic Attorneys General Association to cover her legal costs. The state comptroller’s office confirmed none of the taxpayer funds have been touched.
James, first elected in 2018 and earning $220,000 a year, now faces the political and legal fight of her career. The same prosecutor who once targeted Trump now finds herself under federal indictment.
