Federal probe examines claims of false information in loan documents for two properties
The FBI and US Attorney’s Office in Albany have formally launched a criminal investigation into alleged mortgage fraud involving New York attorney general Letitia James, a source familiar with the matter confirmed.
The probe, first reported by the Albany Times Union, follows a referral to the Justice Department last month by Federal Housing Finance Agency director William Pulte.
According to Pulte’s referral, James allegedly falsified mortgage application records for two properties: a home she purchased in Virginia in 2023, and a Brooklyn brownstone she has owned since 2001.
The allegations claim James misrepresented details in her loan paperwork to receive more favorable mortgage terms, including falsely declaring the Virginia property as her “principal residence” despite continuing to serve as New York’s top law enforcement officer.
“Ms. James, for both properties listed above, appears to have falsified records in order to meet certain lending requirements and receive favorable loan terms,” Pulte stated in a letter to Attorney General Pam Bondi, further alleging potential violations including wire fraud, mail fraud, bank fraud, and false statements to a financial institution.
The case is being handled by US Attorney John Sarcone III, who leads the Northern District of New York and is known to be an ally of president Donald Trump. Representative Elise Stefanik, whose district includes the jurisdiction of the investigation, praised the move by federal authorities, calling it “a vital step toward justice.”
“I will continue to fight to expose NY corruption, protect constitutional rights, and hold these failed Democrat leaders in NY accountable,” Stefanik said.
James denies ‘baseless’ allegations
Attorney General James has dismissed the accusations as politically motivated. Her office declined to comment on the investigation directly, but she previously described the referral as part of a “revenge tour” by President Trump—retaliation for the civil fraud case she brought against him and the Trump Organization, which resulted in a $454 million judgment earlier this year.
James, who gained national attention for her high-profile investigations into Trump, famously said in 2019 that “no one is above the law” as she launched the case. Now, her critics are echoing that phrase amid accusations she manipulated mortgage documentation to obtain personal financial benefit.
To defend against the growing scrutiny, the attorney general’s office has retained prominent defense attorney Abbe David Lowell, known for representing Hunter Biden in federal investigations. According to reports, Lowell was hired by the office in an official capacity, meaning New York taxpayers could ultimately cover his fees.
Read more: NY AG's lawyer urges Justice Department to reject call for criminal investigation
“These baseless and long-discredited allegations, put to rest by my April 24 letter to the Department of Justice, are suddenly back in the news just days after President Trump publicly attacked Attorney General James,” Lowell said in a statement Thursday. “This appears to be the political retribution President Trump threatened to exact that AG Bondi assured the Senate would not occur on her watch.
“If prosecutors are genuinely interested in the truth, we are prepared to meet false claims with facts.”
James’ legal funding sparks controversy
James plans to use a combination of state funds and private legal defense fundraising to support her legal team. A provision is expected to be approved in Albany to create a $10 million legal defense fund for state officials, which could be used to cover attorneys’ fees and expenses, including for investigations not directly tied to their government work.
Meanwhile, America First Legal (AFL), a conservative legal advocacy group founded by former Trump administration officials, filed a separate complaint against James with the New York State Unified Court System’s Committee on Professional Standards, which oversees attorney conduct.
AFL alleges that if James knowingly submitted false statements to secure favorable loans, she may be guilty of professional misconduct and subject to discipline by the New York Bar.
“If Ms. James has engaged in fraud by deceiving her lenders and the government to obtain financial benefits she would otherwise not be entitled to, then she has engaged in professional misconduct and violated her obligations as a lawyer and is subject to discipline by the New York Bar,” AFL’s complaint stated.
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