FBI and US Attorney's Office investigate New York Attorney General Letitia James for alleged mortgage fraud

The FBI in Albany, along with the US Attorney's Office for the Northern District of New York, has launched a formal criminal investigation against New York Attorney General Letitia James, focusing on real estate and mortgage transactions, according to the Times Union.

The inquiry examines possible irregularities in property purchases and personal loans transacted in New York and Virginia, some of which may be outside the federal statute of limitations, although a recent 2023 mortgage is under scrutiny.

Details of the allegations

The case originated after a letter from William J. Pulte, director of the Federal Housing Finance Agency (FHFA), was sent in April 2025 to US Attorney General Pam Bondi.

Pulte alleged that James may have "falsified bank documents and property records” to obtain government-backed loans and more favorable terms. Notable among the allegations were:

Property in Norfolk, Virginia (2023)

James, as a co-debtor, participated in the purchase of a single-family home with her niece, Shamice Thompson-Hairston. A power of attorney signed by James on August 17, 2023 stated, “I hereby declare that I intend to occupy this property as my principal residence.”

However, New York state law requires elected officials, such as James, to keep their principal residence in the state.

Pulte noted that this declaration could have allowed James to access a lower mortgage rate, as mortgages for primary residences typically have better terms.

The document was signed as a witness by Jennifer Levy, first deputy attorney general, raising questions about her involvement in a personal transaction for James.

Brooklyn property (2001)

James purchased a multifamily residence in 2001, which according to a certificate of occupancy from that year has five units.

However, on building permits, mortgage applications and other documents, James recorded it as having four units, which could have allowed her to qualify for loans with better terms.

However, her attorney, Abbe Lowell, contends that the property has always been a four-unit and that the certificate of occupancy does not reflect the current configuration.

Queens Property (1983)

Mortgage documents from 1983, when James was 24, record her as "wife" to her father, with whom she purchased property.

Lowell attributed this to a clerical error made by someone else, although James signed the notarized document.

James' response and her defense

James has called the allegations "baseless" and has hired renowned criminal defense attorney Abbe Lowell to represent her.

Lowell, who receives compensation from a private legal defense fund and public funds, sent a six-page letter to Bondi on April 24, accusing President Donald Trump of orchestrating a campaign of "political retribution" against James for her previous investigations into Trump's business dealings.

In that regard, Lowell argued that in the Virginia purchase, James made clear in a mailing to the mortgage broker two weeks before the power of attorney that the property “WILL NOT be my primary residence” and would be occupied by her niece. The power of attorney stating otherwise was a mistake.

On the Brooklyn property, Lowell asserted that numerous public records from the past two decades confirm that it has four units, and accused Pulte of selectively relying on a 24-year-old certificate of occupancy.

Regarding the 1983 mortgage, Lowell insisted that the error in listing James as her father's "wife" was administrative and did not involve her direct intervention.

Political tensions

The investigation coincides with political tensions, as James led a civil suit against Trump in 2022, resulting in a fine of more than $360 million for “ill-gotten gains" derived from inflating property values.

Trump, who appealed the verdict, has called James' actions politically motivated and, on April 14, wrote on Truth Social that James was, "a totally corrupt politician" and "should resign from her position."

Democrats back her

For the New York state budget being debated this week, Democratic leaders included a $10 million fund for James and other officials to cover legal fees in cases related to Trump administration actions, according to reports the New York Post.

For their part, Republican lawmakers plan to challenge this fund, arguing that the transactions under investigation are personal and not linked to James' tenure.

The federal investigation

John A. Sarcone III, US Attorney for the Northern District of New York, confirmed that the case is being handled by the Department of Justice (DOJ) and the FBI in Albany, and in that regard noted, “we stand prepared to act in the capacity that we need to when and if we are informed there’s a charge to be made.”

In addition, Sarcone criticized James, accusing her of unethical campaigning against Trump, and assured that his office acts in a "proper and professional” manner.

Pulte suggested that James' alleged actions could violate federal statutes on electronic fraud, postal, banking and false statements to financial institutions.

Lowell, for his part, urged Bondi to maintain the DOJ's independence and avoid politicization.

Next steps

The investigation is still ongoing, and so far no formal charges have been filed against James. The focus is on whether the evidence substantiates the fraud allegations and how the political tension between Attorney General James and the Trump Administration continues to play out.