AT A GLANCE
- A Virginia grand jury rejected prosecutors’ latest attempt to indict New York Attorney General Letitia James on mortgage fraud charges.
- The original prosecution was dismissed after a judge ruled Trump-installed U.S. Attorney Lindsey Halligan was illegally appointed.
- Prosecutors may try again, despite pushback, legal hurdles, and accusations of political retaliation.
- James and her attorney call the continued pursuit an abuse of the justice system.
Grand Jury Rejects Letitia James Mortgage Fraud Indictment Amid DOJ Setbacks
A Virginia grand jury rejected prosecutors’ attempt to secure a new indictment against New York Attorney General Letitia James, marking another failed effort by the Justice Department to bring mortgage fraud charges that President Donald Trump had pushed for. The move comes after a judge dismissed the prior case due to the illegal appointment of Lindsey Halligan, the Trump-installed U.S. attorney who presented the original charges against James and former FBI Director James Comey.
Prosecutors returned to a grand jury hoping to revive the case, but jurors declined to bring charges, according to people familiar with the matter. It’s a rare instance of a grand jury refusing to indict, especially in a high-profile political case. One person familiar with the situation said prosecutors are expected to try again, despite the setback and despite being unauthorized to speak publicly.
James had initially been accused of bank fraud and making false statements tied to her 2020 purchase of a modest home in Norfolk, Virginia, where she has family. Prosecutors claimed she signed a “second home rider” promising to use the house for personal use for at least a year but instead rented it to a family of three, allegedly securing a lower loan rate meant for second homes rather than investment properties.
Halligan, a former Trump lawyer and White House aide, personally presented the case to the grand jury after being placed in charge of the Eastern District of Virginia under Trump’s pressure to target Comey and James.
James has consistently denied any wrongdoing, accusing the administration of weaponizing the justice system in retaliation for her investigations and civil lawsuits against Trump. In a statement Thursday, she said it is “time for this unchecked weaponization of our justice system to stop.”
Her attorney, Abbe Lowell, said the grand jury’s rejection should end the matter entirely, warning that continuing the prosecution after both a court dismissal and a grand jury refusal would amount to a “shocking assault on the rule of law” and undermine the justice system.
Even if prosecutors manage to revive the charges, they face steep barriers securing a conviction. James’ legal team has argued the case is a vindictive prosecution aimed at punishing a prominent Trump critic who led high-profile legal challenges against him, including a massive civil fraud judgment that was later overturned on appeal.
James’ lawyers also alleged “outrageous government conduct” before her indictment, but the judge overseeing the case never ruled on that claim. Instead, the prosecution collapsed last month when U.S. District Judge Cameron McGowan Currie held that Halligan’s appointment as U.S. attorney was improper.
Currie took issue with how the Trump administration installed Halligan after Erik Siebert, the interim U.S. attorney, resigned under pressure to bring charges against Comey and James. Trump announced Halligan’s nomination the same night Siebert left and publicly urged Attorney General Pam Bondi to take immediate action, declaring that “JUSTICE MUST BE SERVED, NOW!!!” on Truth Social.
Comey was indicted three days after Halligan was sworn in. James was charged two weeks later. Though the Justice Department attempted to defend Halligan’s appointment, it also disclosed that Bondi gave Halligan a separate “Special Attorney” designation in what appeared to be an attempt to shield the cases from legal challenges. The judge ruled that such a retroactive move could not rescue the prosecution.
