New York Attorney General Letitia James has pleaded not guilty to federal charges of bank fraud and making false statements to a financial institution. The charges stem from allegations that she obtained a mortgage loan for a property in Norfolk, Virginia, under terms intended for a secondary residence, while allegedly using it as a rental investment. James and her legal team claim the case is "vindictive" and have challenged the appointment of the US attorney overseeing the case, citing political motivations.
Charges and Plea
Letitia James, the New York Attorney General, entered a plea of not guilty in US District Court in Norfolk, Virginia, to federal charges including bank fraud and making false statements to a financial institution. Following the arraignment, a judge set a trial date for January 26. James's legal team has requested a speedy trial.
Allegations of Mortgage Fraud
The federal government alleges that James purchased a three-bedroom home in Norfolk in 2020 using a mortgage loan that required the property to be used as her secondary residence. The loan terms reportedly prohibited shared ownership or "timesharing" of the home. Prosecutors claim the property was not occupied by James as a secondary residence but was instead used as a rental investment property, rented to a family of three. This alleged "misrepresentation," according to prosecutors, allowed James to secure favorable loan terms that would not have been available for an investment property. Sources in US media have reported that James bought the home for her great-niece in 2020, and that the relative never paid rent.
Legal Proceedings and Defense
James's legal team is preparing to challenge the appointment of US attorney Lindsey Halligan to the case. Ms. Halligan, identified as a former personal attorney for Donald Trump, was appointed after another US prosecutor, Erik Siebert, resigned. Siebert reportedly informed the Justice Department that he had not found sufficient evidence to charge James. James's attorneys are also filing a motion to dismiss the case, asserting it is "vindictive."
Context of Accusations
Speaking outside the courthouse, James accused Donald Trump of using the justice system as a "vehicle of retribution" against her and other critics, stating the justice system had been "weaponised." James is one of several critics of Trump who have faced investigation or criminal charges in recent weeks. Former Federal Bureau of Investigation director James Comey was charged with making false statements to Congress, and former national security adviser John Bolton faces charges of sending and wilfully retaining national defense information. Last month, Trump posted on his social media site Truth Social, calling for Attorney General Pam Bondi to bring charges against his political opponents, stating, "We can't delay any longer, it's killing our reputation and credibility."
In 2022, James initiated a civil fraud case against Trump and the Trump Organization. Trump was subsequently found liable for falsifying records to secure better loan deals, leading to a $500 million fine. An appeals court later upheld Trump's liability for fraud but deemed the fine excessive and overturned it.