FBI, U.S. Attorney Office Investigate AG Letitia James Over Alleged Mortgage Fraud

Federal authorities, including the FBI and the U.S. Attorney’s Office in Albany, have initiated a criminal investigation into allegations of mortgage fraud involving New York Attorney General Letitia James, according to a source with direct knowledge of the matter, The New York Post has learned.

The probe, initially reported by the Albany Times Union, stems from a referral made last month by William Pulte, Director of the Federal Housing Finance Agency, urging the Justice Department to examine James’ real estate transactions.

The matter has been directed to the U.S. Attorney’s Office in New York’s Northern District, overseen by John Sarcone III, a known ally of former President Donald Trump.

In his referral, Pulte accused James of “falsifying records” to secure favorable mortgage terms for two properties: a house she bought in Virginia in 2023 and a Brooklyn brownstone she has owned since 2001.

According to the letter, the attorney general allegedly designated the Virginia property as her “principal residence” while still holding office in New York, and inaccurately reported the number of residential units in her Brooklyn home.

“Ms. James, for both properties listed above, appears to have falsified records in order to meet certain lending requirements and receive favorable loan terms,” Pulte wrote in his message to Attorney General Pam Bondi.

Such actions, if proven, could lead to criminal charges including wire fraud, mail fraud, bank fraud, and providing false information to a financial institution, among others, Pulte added.

Previously, James characterized the accusations as “baseless” and claimed they were part of a politically motivated “revenge tour” orchestrated by Trump, following her civil fraud lawsuit against him and the Trump Organization.

James notably declared that “no one is above the law” when she launched her investigation into Trump in 2019, which ultimately resulted in a \$454 million judgment against him and his real estate company.

In response to the current allegations, the Attorney General’s Office has hired Abbe David Lowell, a prominent attorney who also represents Hunter Biden in his federal legal matters.

According to Times Union, Lowell was retained by the office of the attorney general itself, not by James personally—meaning New York taxpayers will likely cover the cost of his legal services.

Meanwhile, Albany Democrats are poised to approve a provision for a $10 million discretionary fund that state officials can use to pay for “any reasonable attorneys’ fees and expenses incurred,” including legal costs for matters not directly tied to their government roles.

A spokesperson for James confirmed Wednesday that she will use a combination of state funds and a private legal defense fund to combat the charges.

In a sharp letter to Bondi last month, Lowell argued that the mortgage fraud allegations were simply the latest baseless attack in Trump’s “revenge tour” against the state’s chief law enforcement officer.

Separately, America First Legal (AFL), a conservative legal watchdog group connected to the Trump administration, lodged a complaint with the New York State Unified Court System’s Committee on Professional Standards, which governs attorney discipline.

“If Ms. James has engaged in fraud by deceiving her lenders and the government to obtain financial benefits she would otherwise not be entitled to, then she has engaged in professional misconduct and violated her obligations as a lawyer and is subject to discipline by the New York Bar,” AFL’s April 24 complaint states.