Federal prosecutors have opened an investigation into a criminal referral made by theTrump administrationagainst New York’s attorney general,Letitia James, that alleged she may have falsified paperwork for properties she owns in Virginia and New York, according to people familiar with the matter.
The investigation marks a swift and notable escalation against James, a major political enemy ofDonald Trump, who was ordered to pay more than $450m in penalties as a result of a lawsuit brought by James’s office that accused him of inflating his net worth to secure financial benefits.
In what appears to be the early stages of the FBI criminal investigation, prosecutors have impaneled a federal grand jury to hear evidence in the eastern district of Maryland after the head of the federal housing agency, William Pulte, last month made the referral to the justice department, the people said.
The investigation appears to be multi-pronged, the people said, with involvement from the FBI inNew Yorkin addition to Virginia. The investigation appears to have gathered pace only in recent weeks, when Pulte received a request for documents that underpinned his referral, the people said.
The criminal referral rehashed claims touted online by Trump allies that James may have committed fraud byattesting in paperwork in 2023that she would make a house in Norfolk, Virginia, which she was helping a relative to buy, as her principal residence while she was New York’s attorney general.
Whether the allegations are substantial enough to result in criminal charges remains unclear. But its existence, which has not been preciously reported, regardless raises the legal stakes for James in what appears to be the first criminal inquiry into one of Trump’s foremost political adversaries.
James has dismissed the allegations as politically motivated retribution. In a letter to the justice department last week, James’s lawyer argued the residency claim was a mistake and that she had told the mortgage broker the house would not be her main residence.
“Director Pulte cherry-picked an August 17, 2023 power of attorney that mistakenly stated the property to be Ms James’ principal residence,” James’s lawyer Abbe Lowell wrote. “The broker understood this, and that Ms. James was not a Virginia resident.”
Spokespeople for the justice department and the federal housing finance agency declined to comment. Abbe Lowell, the lawyer for James, did not immediately respond to a request seeking comment.
Still, the allegations havegained traction in recent weeksamong Trump’s allies who appear to see an opportunity to try to invalidate Trump’s $450m civil fraud trial verdict by challenging James’s eligibility to be the attorney general, and to advance the possibility of criminal charges.
The power of attorney was signed by James in August 2023, weeks before the start of the civil fraud trial. New York state law requires public officeholders to be a resident of the state and Trump’s allies have argued when the case went to trial in October 2024, James should have been ineligible to be the attorney general.
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Trump’s allies have also accused James of possibly obtaining improper financial benefits by attesting she would live in the Virginia house, even though any supposed lower interest rates for the mortgage from the property being owner-occupied would have come with her relative living in the house.
Real estate lawyers in Virginia suggested the paperwork was not likely to be an issue unless James had misrepresented her intentions with the house to a lender or insurer. James said in a separate loan application that she did not intend to live in Virginia.
The criminal referral also accused James of buying a house in Brooklyn in 2001 that she characterized as a five-unit property with a loan that was only available for homes with four units, in order to receive better interest rates.
The referral referenced a January 2001 certificate of occupancy that said the house had five units. In the letter back to the justice department, Lowell said the house had four floors, had been used by James as four units, and numerous other New York City records listed the building as four units.