DOJ again fails to indict James for alleged mortgage fraud

Chris Strohm and Benjamin Penn, Bloomberg News on Dec 11, 2025

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WASHINGTON — The Justice Department failed again to secure a grand jury indictment against New York State Attorney General Letitia James over mortgage fraud claims.

Prosecutors have been seeking to renew charges against James after a federal judge dismissed a case against her last month, saying that the prosecutor, Lindsey Halligan, the U.S. Attorney for the Eastern District of Virginia, had been improperly appointed.

The department suffered an embarrassing defeat earlier this month when a different grand jury in Virginia refused to indict James. On Thursday, prosecutors unsuccessfully tried again to ask a grand jury in a different Virginia court to return an indictment.

James had previously called the charges “political retribution” for a civil case she brought against Donald 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.

“For the second time in seven days, the Department of Justice has failed in its clear attempt to fulfill President Trump’s political vendetta against Attorney General James,” her lawyer, Abbe Lowell, said in a statement. “This unprecedented rejection makes even clearer that this case should never have seen the light of day.”

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 documents for a property she owns in Virginia.

The initial charges followed a consistent campaign by Trump for legal action against James after she prosecuted him and his real estate company for fraud.

James won after a trial in which Trump took the witness stand and denied wrongdoing. An appeals court found that Trump and his company were liable for fraud but threw out the $464 million penalty as “excessive.” Both sides have appealed, escalating the case to the state’s highest court.