New York Attorney General Letitia James is about to appear in federal court in Virginia early Friday for her arraignment on charges of bank fraud and making false statements to a financial institution.
James was indicted October 9 by a federal grand jury in the Eastern District of Virginia on charges related to a 2020 home purchase in Norfolk.
Authorities said James falsely claimed the property would be her second residence to obtain favorable loan terms, but instead rented it out to family members and pocketed the difference.
According to the indictment, James obtained a fixed-rate conventional mortgage at an interest rate of 3% by stating the house was a secondary residence. Prosecutors say James should have paid a mortgage rate of 3.815% if the property was classified as a rental investment property.
The government alleges James stood to gain approximately $17,837 over the life of the 30-year loan.
The case was brought by Lindsey Halligan, the acting U.S. attorney in the Eastern District of Virginia. Halligan was appointed by President Donald Trump after her predecessor, Erik Siebert, resigned under pressure last month.
“No one is above the law. The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public’s trust,” Halligan said in a statement. “The facts and the law in this case are clear, and we will continue following them to ensure that justice is served.”
James faces up to 30 years in prison and up to a $1 million fine on each count if convicted. Federal sentencing guidelines typically result in sentences much less than the maximum penalties.
James has denied the charges and is expected to plead not guilty.
“This is nothing more than a continuation of the president’s desperate weaponization of our justice system,” James said. “He is forcing federal law enforcement agencies to do his bidding, all because I did my job as the New York State Attorney General. These charges are baseless, and the president’s own public statements make clear that his only goal is political retribution at any cost.”
Trump has repeatedly called for James to be prosecuted. In a September post on Truth Social, Trump wrote about James and others, “They’re all guilty as hell,” adding, “JUSTICE MUST BE SERVED, NOW!!!”
The case began in April when William Pulte, director of the Federal Housing Finance Agency and a Trump ally, sent a letter to Attorney General Pam Bondi accusing James of mortgage fraud. Pulte alleged James made false statements on mortgage loan applications for properties in Virginia and New York.
In 2019, James prosecuted a Brooklyn couple for mortgage fraud in a case involving a $1.3 million scheme. At the time, James said, “Iacono and Gjekovic falsified document after document in order to pad their own pockets. Let this serve as a warning to all of those who try to carry out such deliberate schemes: There is no place in this state for individuals who try to cash in at the expense of hardworking New Yorkers.”
Judge Jamar Walker, who was appointed to the bench in 2023 by then-President Joe Biden, is overseeing James’ trial.