Federal prosecutors have charged New York Attorney General Letitia James with bank fraud and making false statements to a financial institution, serious offenses that could lead to a maximum sentence of 60 years in prison and fines amounting to $2 million. The charges stem from allegations that James falsified loan documents to secure a lower mortgage rate for a property in Norfolk, Virginia.
"Despite these representations, the indictment reads, 'the Norfolk property was not occupied or used by James as a secondary residence and was instead used as a rental investment property.'"
According to court filings, James declared the property as an "investment" on her financial disclosure forms from 2020 to 2023. However, she is accused of misleading her lender by stating that the property would serve as her second home. In 2024, a month after a criminal complaint was filed against her, James reclassified the property from "investment" to "real property" and increased its listed value to a range between $150,000 and $250,000.
The indictment alleges that James represented the Norfolk property as a secondary residence on her loan application from OVM Financial, which was necessary to qualify for a mortgage backed by Fannie Mae. This type of loan prohibits the property's use as a rental investment. Despite these terms, federal authorities contend that James did not use the property as a secondary residence and instead rented it out, accruing nearly $19,000 in savings from the fraudulently obtained lower mortgage rate.
Furthermore, James is accused of making contradictory statements on her homeowners insurance paperwork, claiming the home would be "owner occupied," while treating it as rental real estate on her federal taxes. She reportedly declared "thousands of dollars in rents received" and claimed deductions related to the property’s rental use.
Letitia James, who was elected in 2018 with an annual salary of $220,000, now confronts a significant legal battle. She has opted not to use a $10 million state fund set aside for legal fees, as confirmed by her office and the state comptroller’s office. Instead, the Democratic Attorneys General Association is expected to cover her legal expenses, which former prosecutor Neama Rahmani estimates could fall between $5 to $10 million.
Her first court appearance is scheduled for October 24 in Virginia. The charges against James have sparked considerable discussion, as the prosecutor once known for her legal challenges against President Donald Trump now faces her own legal scrutiny.
