A federal grand jury in Norfolk, Virginia declined to indict New York Attorney General Letitia James on Thursday over mortgage fraud charges. It’s the second time charges have failed to be brought against the controversial attorney general, less than two weeks after a judge threw out the initial case.
The Justice Department could attempt to seek an indictment a third time, according to a source familiar with the matte.
“As I have said from the start, the charges against me are baseless,” James said in a statement Thursday, celebrating the news. “It is time for this unchecked weaponization of our justice system to stop. I am grateful to the members of the grand jury and humbled by the support I have received from across the country.”
James was initially charged with bank fraud and making false statements to a financial institution in connection with a home purchase in Norfolk, Virginia, in 2020.
Prosecutors alleged James falsely listed a home she purchased as a second home instead of an investment property to save potentially $19,000 over the life of the loan with a more favorable mortgage rate.
The initial indictment was secured in October by Lindsey Halligan, a former White House aide and Trump lawyer who personally presented the case to the grand jury after being installed as U.S. attorney for the Eastern District of Virginia.
U.S. District Judge Cameron Currie dismissed the indictment on November 24, ruling that Halligan was improperly appointed to her role — and therefore the case against James must be dismissed, according to CNN. Currie wrote that Halligan “has been unlawfully serving in that role since September 22, 2025.”
“All actions flowing from Ms. Halligan’s defective appointment” including James’ indictment “were unlawful exercises of executive power,” the judge wrote.
Trump named Halligan U.S. attorney for the Eastern District on September 20. Her appointment came after Trump urged Attorney General Pam Bondi in a social media post to push ahead with prosecutions of James, Comey, and Democratic Senator Adam Schiff of California.
“Pam: I have reviewed over 30 statements and posts saying that, essentially, ‘same old story as last time, all talk, no action,'” NBC News reported Trump wrote.
The failure to secure an indictment of James on Thursday does not bar prosecutors from attempting to do so again in the future. But it is extraordinarily rare for grand juries to decline to indict people. Federal prosecutors investigated more than 150,000 people in the 2016 fiscal year, and in only six cases reported not bringing charges because the grand jury voted not to indict, CBS News reported.
It was famously said that prosecutors could persuade a grand jury to “indict a ham sandwich.”
James successfully brought a civil fraud case against Trump during the Biden administration, winning a staggering judgment in a lawsuit alleging he defrauded banks by overstating the value of his real estate holdings on financial statements. The fine was later tossed out by a higher court, but both sides are appealing.
James has denied any wrongdoing and accused the administration of using the justice system to seek revenge against Trump’s political opponents.