Grand Jury Declines Again to Indict NY’s James in Fraud Case (1)

A federal grand jury in Virginia has refused to indict New York State Attorney General Letitia James for a second time over mortgage fraud claims.

Prosecutors had sought charges against James less than two weeks after a federal judge dismissed the earlier case, saying that Lindsey Halligan, the US Attorney for the Eastern District of Virginia, had been improperly appointed.

“The grand jury’s refusal to re-indict Attorney General James is a decisive rejection of a case that should never have existed in the first place,” James’s lawyer Abbe Lowell said in a statement.

James shouldn’t have a premature celebration because the Justice Department might try again to indict her, according to a source familiar with the matter who declined to be identified discussing confidential deliberations.

A representative for the US Attorney’s Office for the Eastern District of Virginia had no immediate comment.

“As I have said from the start, the charges against me are baseless,” James said in a statement. “It is time for this unchecked weaponization of our justice system to stop.”

James had previously called the charges “political retribution” for a civil case she brought against Trump before his second term in office. She pleaded not guilty and challenged the appointment of Halligan, who was named to the post in September after her predecessor resigned under pressure to bring the charges.

The Justice Department’s probe into James stemmed from claims by Federal Housing Finance Agency Director Bill Pulte that she may have committed mortgage fraud based on the residence status she listed on loan applications.

The initial charges followed a consistent campaign by Trump for legal action against James.

“We can’t delay any longer, it’s killing our reputation and credibility,” Trump wrote in a Truth Social post in September. “JUSTICE MUST BE SERVED, NOW!!!”

James had campaigned on promises to investigate Trump. In 2022, her office sued Trump and his real estate company, alleging he reaped hundreds of millions of dollars in “illegal profit” by inflating the value of assets, including his Mar-a-Lago estate and Trump Tower penthouse. The complaint alleged Trump and his two eldest sons carried out the scheme for years so he could get better loan terms from Deutsche Bank AG and other lenders.

James won after a trial in which Trump took the witness stand and denied wrongdoing. A judge set the penalty at $464 million. But a New York appeals court in August vacated the fine, ruling it was unconstitutionally “excessive,” while upholding the judge’s finding that Trump and his company were liable for fraud. Both sides have appealed, escalating the case to the state’s highest court.

To contact the reporters on this story:
Chris Strohm in Washington at cstrohm1@bloomberg.net;
Jimmy Jenkins in Washington at jjenkins199@bloomberg.net

To contact the editors responsible for this story:
Ben Bain at bbain2@bloomberg.net

Sara Forden, Peter Blumberg

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