The Justice Department has opened a fraud investigation into a Federal Reserve governor, Lisa Cook, over claims promoted by President Trump that she falsified a mortgage application, according to people familiar with the situation.
The move was instigated by Ed Martin, a hyperpartisan Trump loyalist with little prosecutorial experience, who has said that it is legitimate for federal officials to publicly air criminal investigations into people targeted by the president, even if an investigation does not result on a conviction or even an indictment.
It is not clear which U.S. attorney’s offices are involved in the probe, but Ms. Cook previously reported in disclosures that she had owned homes in Georgia, Massachusetts and Michigan, according to court records. Federal prosecutors have begun issuing subpoenas, one of the people briefed in the investigation said.
The opening of the investigation, earlier reported by The Wall Street Journal, comes as little surprise. Mr. Martin, who leads the department’s vaguely defined weaponization task force after Senate Republicans scuttled his nomination to be the permanent U.S. attorney in the District of Columbia, signaled his intention to do so as the White House stepped up its attacks on Ms. Cook.
The saga began when Bill Pulte, the director of the Federal Housing Finance Agency, said his office had investigated Ms. Cook and found that she appeared to have falsified bank documents to obtain favorable terms on a mortgage. Mr. Pulte later referred the matter to the Justice Department for a criminal inquiry, before Mr. Trump announced he would fire Ms. Cook from the Fed.
Ms. Cook initially responded in a statement that she would not be “bullied to step down from my position because of some questions raised in a tweet.” But she said she would take “questions about my financial history seriously” and gather the facts. She then sued the administration over its attempted firing, and in a hearing last week, her lawyers depicted her potential ouster as an illegal bid to undermine the traditional independence of the Federal Reserve.
In a statement Thursday, Abbe D. Lowell, the lawyer representing Ms. Cook, said the reports suggested the Trump administration was “scrambling to invent new justifications for its overreach,” describing the Justice Department as “perhaps the most politicized” in American history.
“The questions over how Governor Cook described her properties from time to time, which we have started to address in the pending case and will continue to do so, are not fraud, but it takes nothing for this D.O.J. to undertake a new politicized investigation, and they appear to have just done it again,” Mr. Lowell continued.
A Justice Department spokesman declined to comment.
Mr. Martin, who has been given few staff but broad latitude to team up with U.S. attorney’s offices around the country, flouted the department’s procedural norms last month by suggesting to the Fed chairman, Jerome Powell, that Ms. Cook step aside.
Ms. Cook’s case “requires further examination” Mr. Martin wrote in a letter to Mr. Powell, suggesting that the department could be pursuing an investigation.
“At this time, I encourage you to remove Ms. Cook from your board,” Mr. Martin wrote. “Do it today before it is too late! After all, no American thinks it is appropriate that she serve during this time with a cloud hanging over her.”
The administration, led by Mr. Pulte, has increasingly scrutinized the mortgage applications of Mr. Trump’s political adversaries to seek retribution against his enemies. The Justice Department, under the leadership of Attorney General Pam Bondi, has acted on referrals from other government agencies by proceeding with mortgage fraud investigations of the New York State attorney general, Letitia James, and Senator Adam B. Schiff, two prominent Democrats who are known as critics of Mr. Trump.
Glenn Thrush covers the Department of Justice for The Times and has also written about gun violence, civil rights and conditions in the country’s jails and prisons.
Devlin Barrett covers the Justice Department and the F.B.I. for The Times.
Tony Romm is a reporter covering economic policy and the Trump administration for The Times, based in Washington.
The post Justice Dept. Opens Criminal Inquiry Into Lisa Cook, Elevating Trump’s Claims appeared first on New York Times.
