A grand jury in Virginia on Thursday rejected Justice Department efforts to charge New York Attorney General Letitia James with mortgage fraud, declining to indict her again after a judge dismissed the charges last week.
The refusal by a grand jury in Norfolk marks a major defeat for President Donald Trump, who has made a priority of prosecuting James, a longtime foe. As New York attorney general, James brought a civil fraud case against Trump and his real estate empire, which resulted in a verdict that Trump and others in his company had committed fraud.
An official familiar with the matter, who spoke on the condition of anonymity because they were not authorized to speak publicly, said “there should be no premature celebrations,” implying that the administration could try a third time to obtain an indictment.
In September, Trump pushed out his pick for U.S. attorney in the Eastern District of Virginia, Erik S. Siebert, over his decision to not indict James and another of Trump’s targets, former FBI director James B. Comey.
He also posted a message on social media demanding that Attorney General Pam Bondi move ahead with the prosecutions. The administration then appointed Lindsey Halligan, one of Trump’s personal lawyers, to replace Siebert. She personally presented the case against James to a grand jury in September, securing an indictment on one count of bank fraud and one count of making a false statement related to a Virginia property she purchased years ago. Halligan also presented the case against Comey.
But a federal judge dismissed both indictments last month, determining that Trump’s rushed appointment of Halligan was unlawful and therefore she did not have the authority to present the cases to a grand jury.
That left the Justice Department with a choice: reindict the cases or appeal the decision.
On Thursday, Halligan was not involved. The administration has named Roger Keller a prosecutor previously based in Missouri, to handle the case.
The case against James stems from a criminal referral sent to the Justice Department in April by Bill Pulte, the head of the Federal Housing Finance Agency. Pulte, a Trump ally, has also made similar mortgage-fraud allegations against Sen. Adam Schiff (D-California) and Federal Reserve governor Lisa Cook.
Pulte alleged that James lied on loan documents for a house she purchased in Norfolk in 2023. In paperwork related to that purchase, she said the home would be her primary residence even as she served as attorney general in New York. That constituted an effort to fraudulently obtain “more favorable loan terms,” Pulte said.
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