Left: President Donald Trump holds a note from Secretary of State Marco Rubio as he addresses an audience during an event in the State Dining Room at the White House on October 8, 2025. (Francis Chung/POLITICO via AP Images). Right: New York Attorney General Letitia James responding to her bank fraud indictment (X/New York State Attorney General).
Interim U.S. Attorney Lindsey Halligan has taken action once more, this time successfully convincing a Virginia grand jury to charge New York Attorney General Letitia James with federal bank fraud. This comes just weeks after President Donald Trump instructed U.S. Attorney General Pam Bondi to “protect our reputation and credibility” by prosecuting three political adversaries, with James being one of them.
It was well-known that after her election, the Democratic AG would scrutinize every aspect of Trump’s “real estate dealings and any other dealings,” which she did — achieving a fraud judgment after a thorough investigation, including implementation of a substantial civil case penalty against the president, his eldest sons, and the Trump Organization, later rescinded.
There had been ongoing rumors for months that a potential mortgage fraud case was developing within the Trump administration. The allegations suggested that James falsified information on bank documents to obtain a “more favorable loan” for a property in Virginia.
In recent months, similar accusations have been made by the Trump administration regarding Federal Reserve Board governor Lisa Cook and Senator Adam Schiff, D-Calif. — both named along with James and former FBI Director James Comey on September 20 in a supposedly “errant” post by Trump on Truth Social directed at Bondi, urging the AG to unleash Halligan and turn anticipated prosecutions into actualities.
Within a few weeks, James was indicted.
Like with Comey, Halligan, recently appointed under controversial circumstances and formerly a personal lawyer for Trump with no prosecutorial background, was the sole prosecutor endorsing James’ indictment, after reported internal disagreements within the U.S. Attorney’s Office for the Eastern District of Virginia (EDVA) about the case’s validity.
“Brooklyn, NJ”
Lindsey Halligan flubs the address on an official court filing. h/t @Jose_Pagliery pic.twitter.com/51miTZt2hW
— Adam Klasfeld (@KlasfeldReports) October 10, 2025
Should the prosecution survive James’ inevitable motions to dismiss, which will almost certainly include claims of selective or vindictive prosecution, and possibly a challenge of Halligan’s appointment, Halligan will have to prove that James “knowingly made a false statement to a bank,” former federal prosecutor Neama Rahmani told Law&Crime.
Lindsey Halligan, special assistant to the president, speaks with a reporter outside of the White House, Wednesday, Aug. 20, 2025, in Washington. (AP Photo/Jacquelyn Martin).
“That statement must have been material and with the intent to defraud,” Rahmani said, expressing his view that there is “plenty of evidence that James lied about the Virginia home being her secondary residence, so her defense team will have to argue that it wasn’t intentional or material.”
According to the bank fraud and false statements indictment, James purchased a home, representing on bank documents that it would be a secondary residence. She allegedly did so to obtain “more favorable mortgage terms” on a “Fannie Mae-backed loan” — at 3%, instead of 3.815%. Rather than using the property as a personal secondary residence, James allegedly treated it as a “rental investment,” racking up close to $19,000 in “ill-gotten gains.”
Rahmani also said it’s far from certain that James will succeed in dismissing the case, whether on selective or vindictive prosecution grounds or by challenging Halligan’s appointment.
“James’ lawyers will also argue selective (free speech) or vindictive (Trump lawsuit) prosecution, but those arguments rarely win,” he said. “The same goes with the argument that Halligan’s appointment was unlawful.”
“It’s more of a delay tactic than something that actually can derail the prosecution,” Rahmani added.
Preet Bharara, on the other hand, weighed in on the indictment by noting that career EDVA prosecutors believed charges against Comey and James would not stick.
They didn’t say could not be indicted; they said should not be indicted and could not be convicted. See you back here in a few months. https://t.co/NnrQaV2rWb
— Preet Bharara (@PreetBharara) October 9, 2025
“They didn’t say [they] could not be indicted; they said should not be indicted and could not be convicted. See you back here in a few months,” said Bharara, a former U.S. attorney for the Southern District of New York who was famously fired by Trump.
Despite James’ protestations about Trump’s open call for her prosecution, you can expect Trump’s allies to just as quickly point to James’ victory lap following the civil fraud judgment against Trump.
“When powerful people cheat to get better loans, it comes at the expense of hardworking people. Everyday Americans cannot lie to a bank to get a mortgage, and if they did, our government would throw the book at them,” James posted on X in February 2024. “There simply cannot be different rules for different people.”
James has responded to the indictment by calling the charges “baseless” and, considering Trump’s statements, the result of the president’s “desperate weaponization of our justice system,” to further his “goal” of “political retribution at any cost.”
“His decision to fire a United States Attorney who refused to bring charges against me – and replace them with someone who is blindly loyal not to the law, but to the president – is antithetical to the bedrock principles of our country,” James said.
The bank fraud statute notes that this is a crime punishable by up to 30 years and up to a $1 million fine upon conviction.
