New York attorney general Letitia James has pleaded not guilty to federal charges of mortgage fraud and making false statements to a bank. The indictment, filed in a Virginia court, accuses James of obtaining a mortgage under false pretenses when purchasing a home in Norfolk, Virginia, in 2020. Prosecutors allege she claimed the property would serve as her secondary residence while secretly renting it out, gaining nearly $19,000 in improper financial benefits. James, however, firmly denies the accusations, describing them as politically driven.
Her legal team is preparing to contest the case by challenging the appointment of Lindsey Halligan, the newly installed U.S. attorney who brought the charges. Halligan, a Trump ally with limited federal experience, has also filed a separate case against former FBI director James Comey. Both James and Comey’s attorneys argue that Halligan’s appointment may not have been legitimate, suggesting political interference from the White House in her selection.
The Justice Department’s investigation reportedly began after a referral from Federal Housing Finance Agency director Bill Pulte earlier this year, who accused James of fraudulent dealings tied to two properties in Virginia and Brooklyn. Only the Norfolk home remains part of the current case. While prosecutors maintain that James lied about the property’s intended use, internal reports suggest their evidence may be weak — including testimony from James’s grandniece that she lived there rent-free, and a lack of proof of rental income.
James publicly condemned the charges in a video statement, calling them “a continuation of the president’s desperate weaponization of our justice system.” She accused Donald Trump of using federal law enforcement as a tool for revenge against his critics, noting his public calls for prosecution of figures such as herself, Comey, and Congressman Adam Schiff. Trump, in recent Truth Social posts, urged Attorney General Pam Bondi to act swiftly against what he called his “guilty enemies.”
Despite the dramatic political backdrop, questions remain about the strength of the prosecution’s case. Sources within the investigation told ABC News that evidence contradicting the core fraud claim could undermine federal efforts to convict James. For now, the embattled attorney general faces an uphill legal fight — one that could become another flashpoint in the broader battle between Trump’s administration and its opponents within the justice system.
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