There was some very bad news for New York Attorney General Letitia James waiting for her at her alleged “mortgage fraud” home in Brooklyn, New York over the weekend.
Department of Justice Special Attorney Ed Martin was spotted in the neighborhood late Friday conducting a physical inspection of James’ multi-family residential property, a significant new development in the federal mortgage fraud investigation.
Martin, conspicuous in a beige trench coat, visited the Clinton Hill brownstone a week after federal prosecutors convened a grand jury to investigate James on allegations of fraud. The visit is the latest major development in the federal probe that now threatens the Democratic attorney general with potentially serious criminal charges.
Attorney General Pam Bondi appointed Martin to run parallel mortgage fraud investigations into James and California Senator Adam Schiff. Grand juries in Virginia and Maryland are currently weighing criminal indictments for both Democrats over allegations they falsified property records to secure favorable loan terms.
James’ Brooklyn property at 296 Lafayette Avenue in New York City sits at the center of the fraud allegations. The building is classified as a five-unit dwelling, but James allegedly misrepresented it as having only four units on mortgage applications, building permits, and government assistance filings.
This would have allowed her to qualify for better interest rates and lower down payments through Fannie Mae and Freddie Mac, which are only available for properties with four or fewer residential units.
During his Friday afternoon inspection, Martin observed one doorbell at the main entrance and four additional doorbells at a side entrance, with weathered labels reading “1 Floor,” “2 Floor,” “3A,” and “3B.” The physical evidence appears to support allegations that the property houses five separate residential units despite James’ claims otherwise.
A neighbor confronted Martin and an unidentified colleague as they examined the property from the street.
“Tell me why you’re here,” demanded the woman in navy gym shorts and black tank top. “We know who lives here . . . You’re not here about the houses. You’re here because of who lives here. It’s my neighborhood. It’s my block. I have a right to know what you guys are doing.”
I’m just happy to be on a block looking at houses . . . I’m just looking at houses, interesting houses,” Martin responded. “It’s an important house.”
“It’s not. It’s just like every other tract house on this block that was built by developers,” the neighbor said.
“They’re beautiful, beautiful neighborhood,” Martin told her before walking away.
Take a look —
JUSTICE IS FINALLY CATCHING UP WITH NY AG LETICIA JAMES!
DOJ Special Attorney Ed Martin checks out Tish James’ ‘mortgage fraud’ home
James’ Brooklyn property at 296 Lafayette Avenue is classified as a five-unit dwelling, but James is alleged to have misrepresented the building… pic.twitter.com/FNE7S41fIy
— michelle selaty (@michelle_selaty) August 16, 2025
The investigation Martin oversees began when Federal Housing Finance Agency Director Bill Pulte sent a criminal referral to the Justice Department in April. Pulte alleged James may have “falsified bank documents and property records to acquire government backed assistance and loans and more favorable loan terms” through multiple schemes involving properties in New York and Virginia.
Beyond the Brooklyn property, the case includes allegations that James claimed a Norfolk, Virginia home she purchased in 2023 would be her “principal residence” while serving as New York’s attorney general, with the Brooklyn property listed as her second residence. Additional allegations suggest James and her father signed mortgage papers listing themselves as “husband and wife” to meet certain lending requirements.
The grand jury investigation, which is being conducted out of Albany, represents a significant escalation from the mortgage fraud probe. James’ office received subpoenas for documents this week, including materials related to her civil fraud lawsuit against Trump that resulted in a $454 million judgment.
Martin, who now serves as the DOJ’s pardon attorney and leads the department’s new “Weaponization Working Group,” brings significant experience to these high-profile investigations. Before his current role, he served as interim U.S. attorney for Washington, D.C., where he focused on prosecutorial integrity.
“Bill Pulte and his FHFA team got this started with his criminal referral,” Martin said last week. “And as Tish James and Adam Schiff always say: ‘Nobody is above the law.'”
James has been one of Trump’s most persistent legal adversaries since he left office in 2021. She successfully brought civil fraud charges against Trump and his business organization in 2022, with a New York judge finding that Trump and his business partners “grossly overstated Trump’s wealth to obtain favorable loans and other financial benefits.” Trump is currently appealing that decision.
Beyond the civil fraud case, James has emerged as a leading figure challenging Trump’s second administration through litigation. She and other Democratic attorneys general have sued to fight federal spending cuts and layoffs of redundant federal employees, as well as restrictions on transgender surgery on children.
A spokesperson for James suggested the DOJ investigation represents a “weaponization” of prosecutorial power.
“Any weaponization of the justice system should disturb every American,” a spokesperson for James said. “We stand strongly behind our successful litigation against the Trump Organization and the National Rifle Association, and we will continue to stand up for New Yorkers’ rights.”
Trump has been characteristically direct in his assessment of the situation, calling James a “wacky crook” on Truth Social and demanding her resignation.
“Letitia James, a totally corrupt politician, should resign from her position as New York State Attorney General, IMMEDIATELY,” Trump wrote.
The irony of James’ current situation has not been lost on observers who note that she built her political career on the principle that powerful figures must face accountability for alleged financial misconduct. She stated in 2022 that financial fraud is not a “victimless crime” and now herself faces federal scrutiny over her financial misdealing.