NY AG Letitia James Pleads Not Guilty to Mortgage Fraud Charges

Letitia James Pleads Not Guilty to Mortgage Fraud Charges

New York Attorney General Letitia James appeared in a federal courtroom in Norfolk, Virginia, and entered a not guilty plea to charges of alleged mortgage fraud. The charges came after she was indicted earlier this month by the U.S. attorney appointed by President Donald Trump. James faced one count of bank fraud and one count of making false statements to a financial institution.

"Not guilty, judge, to both counts," said James, entering the plea herself. The court set an initial trial date for January 26, which both the government and the defense agreed upon. The trial is expected to last no more than two weeks, with prosecutors planning to call between 8 to 10 witnesses.

James was released on personal recognizance following the hearing. Interim U.S. Attorney Lindsey Halligan, who was appointed by Trump just days after he urged his attorney general to "act NOW!!!" to prosecute James and other political enemies, secured the indictment against James on October 9. As New York’s attorney general, James has been a formidable opponent to Trump, successfully bringing a civil fraud case against him last year and leading multiple lawsuits challenging his administration's policies.

Halligan’s appointment as U.S. attorney followed the ousting of her predecessor, Erik Siebert, who had expressed doubts about bringing cases against James and former FBI Director James Comey. After attorneys representing James filed a motion challenging Halligan's appointment as unlawful, Judge Jamar Walker ordered that the motion be consolidated with the ongoing effort to disqualify her in the case against Comey.

Both James’ attorneys and the Justice Department supported the idea of consolidating the challenges, which will be considered by an out-of-district judge already appointed this week. James, speaking outside the courthouse following her arraignment, criticized the justice system under Trump, calling it “used as a tool of revenge” and a “vehicle of retribution.”

“I want to thank you for your support," James said. "But this is not about me. Yes, this is about all of us. And about our justice system, which has been weaponized. Against a justice system, which has been a tool been used as a tool of revenge."

“But my faith is strong. And my faith is, I have this belief in the justice system, in the rule of law,” James said.

During the hearing, Judge Walker briefly discussed a motion from James’ attorneys ordering Halligan to make no more extrajudicial disclosures to the media following revelations that she sent Signal messages to a reporter about James’ case. Judge Walker noted there was no request to sanction Halligan for the messages, and Roger Keller, the DOJ prosecutor, said that if a requirement was placed on the government to keep a log of Halligan’s discussions with the media, then a similar requirement should be made of James given her statements to the media.

James' attorney Abbe Lowell argued there was a major difference between James voicing public statements under her First Amendment rights and Halligan having discussions about a case with a reporter over an encrypted application with a deletion schedule. Judge Walker set a deadline of November 1 for James to make her first filing on her claim of vindictive prosecution.

The charges James faces accuse her of committing mortgage fraud related to a home she purchased in 2020. According to the indictment, James falsely described the property as a second home to get an advantageous mortgage rate but used it as an "investment property," rented to a family of three. The indictment alleged James collected thousands of dollars in rent and would have saved $17,837 over the life of the mortgage versus a loan at a higher rate.

"No one is above the law. The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public's trust," Halligan said in a statement announcing the charges. "The facts and the law in this case are clear, and we will continue following them to ensure that justice is served."

However, in an internal memo to Siebert in September, prosecutors said James purchased the home in Norfolk, Virginia, for her great-niece and immediately allowed her and her children to begin living in the house rent-free, sources told ABC News. Prosecutors met with James' niece, who stated that she had never signed a lease, had never paid rent for the home, and that James had often sent her money to cover some of the expenses, the memo concluded, according to sources familiar with its contents.

"It's baseless," James said of the charges this month. "It's nothing more than retribution, retribution for doing my job."

James' defense attorneys also filed a motion to the court Thursday to enforce rules prohibiting leaks from prosecutors, after a Monday report by Anna Bower of the online publication "Lawfare" contained Signal text messages exchanged between Halligan and Bower in the days after charges were filed against James. In initiating this contact, Ms. Halligan — the lead prosecutor on this case as of the date of this filing — commented on the credibility and general strength of the evidence presented to the grand jury, the filing states.

James' lawyers argue in their filing that Halligan's comments to Bower run afoul of the Federal Rules of Criminal Procedure, the Code of Federal Regulations, local court rules, the Justice Department Manual, and rules of ethical and professional responsibility.

James' indictment on October 9 came between the indictments of Comey and former Trump national security adviser John Bolton amid what critics call Trump's campaign of retribution against his perceived political foes. Vice President JD Vance has said any such prosecutions are "driven by law and not by politics." If convicted, James faces a maximum of up to 30 years in prison per count, up to a $1 million fine on each count, and forfeiture of the property.