Federal prosecutors are investigating financial transactions involving the New York attorney general, Letitia James, and her longtime hairdresser, opening a new front in their pursuit of one of President Trump’s perceived enemies, according to people with knowledge of the matter.
The hairdresser, Iyesata Marsh, has known Ms. James for years. Last month, Ms. Marsh was indicted in the U.S. District Court for the Western District of Louisiana and charged with bank fraud and aggravated identity theft in connection with the purchase of a Land Rover about three years ago. Court documents accuse Ms. Marsh and her nephew of using the identity and personal information of an unidentified woman in Ohio to buy the vehicle.
The investigation is still in its early stages, but prosecutors are interested in talking to Ms. Marsh about past financial transactions involving Ms. James or her campaign, according to people familiar with the matter who spoke on the condition of anonymity to describe the inquiry.
The new front in the Justice Department’s long-running campaign to build a criminal case against Ms. James shows that the efforts extend beyond one federal prosecutor’s office, and highlight the degree to which investigators are scouring her professional, personal and political life for evidence of wrongdoing.
There is no indication that Ms. Marsh, who has yet to enter a plea in her case, is cooperating. A lawyer representing her, Keith Whiddon, declined to comment. A spokeswoman from the U.S. attorney’s office in the Western District of Louisiana declined to comment.
The new investigation adds to the administration’s efforts to pursue Ms. James, reflecting President Trump’s explicit desire to seek revenge against the New York attorney general. Ms. James is one of his foremost nemeses, having accused him in a lawsuit of inflating his net worth by billions.
Prosecutors last year opened a civil rights inquiry into her office as well as a criminal investigation centered on her purchase of a Norfolk, Va., home in 2020, which yielded an indictment.
But the Norfolk case faltered after a judge tossed out the charges, ruling that the prosecutor who brought it had been appointed unlawfully. Two separate grand juries rejected subsequent efforts to charge Ms. James, dealing an embarrassing setback to Mr. Trump’s bid to put his perceived enemies on trial.
And on Thursday, the U.S. attorney who issued subpoenas in the civil rights inquiry, John A. Sarcone III, was disqualified from any further work on that case when a judge said that he had been serving unlawfully.
The new investigation, like the one into her Norfolk home, has been pushed by Edward R. Martin Jr., a Trump aligned-activist who has said the administration will use the justice system to name and shame White House adversaries. In a highly unusual move for a Justice Department official overseeing an active inquiry, Mr. Martin posed for pictures outside of Ms. James’s Brooklyn home in August.
A lawyer for Ms. James, Abbe D. Lowell, said in a statement that the new investigation reflected frustration with “the string of failures in carrying out President Trump’s political vendetta.” He characterized the prosecution of Ms. Marsh as an attempt “to shake down people based on their association with Ms. James.”
“Like their earlier attempts, this attack on Ms. James is doomed to fail,” he said. “The desperation of those working for Trump is palpable and makes indelible the stain already put on this Justice Department.”
Ms. James has not been accused of any wrongdoing in relation to Ms. Marsh, nor has Ms. Marsh been accused of wrongdoing related to the attorney general. But prosecutors have expressed interest in payments that Ms. James’s 2018 campaign for attorney general made to Ms. Marsh to rent a Brooklyn studio she owns. They have also scrutinized payments to Ms. Marsh related to a musical performance at an Albany, N.Y., political event.
According to a 2019 article from The Wall Street Journal, Ms. Marsh received $36,000 in all, including $22,000 for the studio. At the time, the campaign said, Ms. Marsh had also worked as an event manager.
In the prior case against Ms. James, brought in the Eastern District of Virginia, she was indicted on bank fraud and false financial statements in October. She pleaded not guilty, calling the charges baseless and accusing the Trump administration of trying to use “a weaponized justice system” to retaliate against her.
A month later, the indictment was thrown out when a judge found that the U.S. attorney, Lindsey Halligan, had been unlawfully appointed.
To install Ms. Halligan, Mr. Trump had forced out his previous choice, Erik S. Siebert, after Mr. Siebert agreed with career prosecutors that there was not sufficient evidence to file charges against Ms. James or another of his adversaries, James B. Comey.
Federal prosecutors working for Ms. Halligan tried twice more to indict Ms. James, but grand jurors declined to bring charges both times. It is incredibly rare for a grand jury to reject a proposed indictment once, let alone twice.
Since then, Ms. Halligan has stayed on as the U.S. attorney in Virginia, despite a judge’s ruling that her appointment is not valid. On Tuesday, a federal judge in Richmond ordered her to explain why she has continued to identify as the top prosecutor in court filings.
The original indictment against Ms. James stemmed from the mortgage paperwork for a home she bought in Norfolk, Va., in 2020. Though she indicated that she would use it as a secondary residence, prosecutors said that she always knew that she would use it as a “rental investment property.” The authorities charged that her false claim on the mortgage documents would have saved her $18,933 in interest over the 30-year term of the loan.
The property has been occupied for years by Ms. James’s great-niece, who told a Norfolk grand jury that she did not pay rent. Ms. James herself has only reported receiving $1,350 in rent in five years, though she listed the home as an “investment property” on official disclosures with New York State.
Devlin Barrett covers the Justice Department and the F.B.I. for The Times.
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