The FBI has launched a formal criminal investigation into New York Attorney General Letitia James’s alleged illegal real estate dealings, FBI Director Kash Patel confirmed Sunday.
The investigation focuses on multiple allegations of mortgage fraud that span decades — and James “panicked” during a recent speech while talking about the charges.
A grand jury in the Eastern District of Virginia has issued subpoenas as part of the probe, which began after Federal Housing Finance Agency Director William Pulte sent a criminal referral to the Justice Department.
Pulte alleges James “falsified records” on multiple mortgage applications, including claiming a Virginia home purchased in 2023 as her “principal residence” while serving as New York’s top law enforcement officer, misrepresenting her Brooklyn property as having four units instead of five to obtain a favorable loan rate, and listing her father as her spouse on a 1983 mortgage.
“This case, I can tell you, is being handled by our professional pros who are subject matter experts, reporting directly to headquarters, which reports to” Deputy Director Dan Bongino and me, Patel told Fox News.
When addressing the investigation into her alleged illegal activities on Tuesday, James reportedly panicked and began stumbling over her words and trying to explain herself.
“I don’t know, they keep saying they’re investigating me — as you know we filed a lawsuit against Donald Trump and his family. We secured a $454 million judgment against it, which is on appeal,” James told reporters. “This investigation into me is nothing more than retribution. It’s baseless.”
James admitted making a “clerical error” on a 2023 power of attorney form for the Virginia property that helped her get a better rate, but insisted any wrongdoing ends there.
“Prior to that I had indicated to the mortgage broker that, in fact, in bold capital letters, that I am not a resident of Virginia and never will be,” she said. “They just took the power of attorney and they’re using that as a basis for enforcement for their investigation, when in reality, the power of attorney was never used to determine my eligibility for a mortgage for my niece.”
Take a look —
This is what panic looks like. https://t.co/wSH46l90vf
— Catturd ™ (@catturd2) May 21, 2025
The investigation comes as James continues her own legal offensive against the Trump administration.
James has hired high-powered liberal attorney Abbe David Lowell, who previously represented disgraced former first son Hunter Biden. A James spokesman confirmed she will pay for legal representation using both a private legal defense fund and state funds — meaning New York taxpayers will cover part of her defense.
In a letter to Attorney General Pam Bondi last month, Lowell called the allegations of mortgage fraud against James “baseless and long-discredited” and said the investigation was “the political retribution President Trump threatened.” He acknowledged the false information on the forms but claimed these were cherry-picked while ignoring accurate documents.
New York’s operations budget bill reportedly includes language allowing certain state officials to access a $10 million fund for legal expenses related to federal investigations, a provision that would help cover James’s legal costs.
If charged and convicted, James could face serious penalties. Federal mortgage fraud charges can carry prison sentences of up to 30 years.