NY AG Letitia James Pleads Not Guilty to Federal Mortgage Fraud, Facing Up to 30 Years

New York Attorney General Letitia James pleaded not guilty today in a Virginia federal court to two felony counts of bank fraud and making false statements to a financial institution. The arraignment took place at the Walter E. Hoffman U.S. Courthouse in Norfolk, Virginia, marking a significant legal challenge for the prominent Democrat. The charges stem from allegations that James misrepresented her intent to occupy a Norfolk property, potentially saving nearly $19,000 on a mortgage.

The indictment, issued by a federal grand jury on October 9, alleges that James falsely claimed she would personally reside in a Norfolk home purchased in August 2020 with a $109,600 mortgage loan. Prosecutors contend the property was instead used as a rental investment, occupied by her grandniece’s family. If convicted, James faces a maximum penalty of 30 years in prison and a $1 million fine, though sentencing guidelines typically suggest a lesser punishment for first-time offenders.

James, represented by attorney Abbe Lowell, has vehemently denied the charges, calling them "baseless" and politically motivated. Outside the courthouse, James stated, "This justice system… has been used as a tool of revenge and a weapon against those individuals who simply did their job and who stood up for the rule of law." She also announced plans to challenge the legality of the appointment of U.S. Attorney Lindsey Halligan, who brought the charges.

The case is being prosecuted by Lindsey Halligan, the interim U.S. Attorney for the Eastern District of Virginia and a former personal attorney to President Donald Trump. Halligan's appointment and her role in this case, as well as a similar indictment against former FBI Director James Comey, have drawn scrutiny, with allegations of internal resistance within the Justice Department to bringing these charges. A trial date has been set for January 26, 2026.

This legal development follows James's high-profile civil fraud case against Donald Trump, which resulted in a significant judgment against him. The timing and nature of the federal charges have led James and her supporters to accuse the Trump administration of "weaponizing" federal law enforcement in retaliation for her past actions. Motions to dismiss the case based on claims of vindictive prosecution and Halligan's appointment are expected to be filed by James's legal team.