Trump officials pressuring federal prosecutors to bring criminal charges against NY AG Letitia James: Sources

(NEW YORK) — Top Trump administration officials are pressuring federal prosecutors in Virginia to bring charges against New York Attorney General Letitia James for mortgage fraud, despite investigators so far failing to find sufficient evidence supporting such charges, according to sources familiar with the investigation.

After a five-month investigation and interviews with more than a dozen witnesses, federal prosecutors have so far uncovered no clear evidence that James knowingly made false statements to a financial institution to secure favorable terms on a mortgage for her Virginia home, according to multiple sources briefed on the investigation.

Trump himself has pressured the Department of Justice leadership to investigate James more aggressively, and two officials — Ed Martin, the head of the DOJ’s Weaponization Working Group, and Bill Pulte, the director of the Federal Housing Finance Agency — have pushed the U.S. attorney for the Eastern District of Virginia to seek an indictment of James. 

When federal prosecutors recently declined to indict James, Pulte encouraged Trump to fire Erik Siebert, the U.S. attorney for the Eastern District of Virginia, and replace him with a prosecutor who would be willing to bring charges against James, sources said.

The move to seek an indictment against one of the president’s political rivals — who successfully brought a civil fraud case against Trump last year and leads multiple lawsuits challenging his administration’s policies — would mark a significant escalation in what the president’s critics have labeled a campaign of political retribution.  

Pulte and Martin have argued that James committed mortgage fraud because one of the documents related to a 2023 home purchased by James falsely indicated the property would be her primary residence. However, investigators have so far determined that the document — a limited power of attorney form used by James’ niece to sign documents on her behalf when James closed on the home — was never considered by the loan officers who approved the mortgage, sources said.

Lawyers drafted the document itself for a third-party closing company based on a template that was never corrected, sources said, and every other document in James’ loan file for the mortgage accurately stated that she would not reside at the home. 

Prosecutors have not yet been able to produce evidence that James knowingly filled out the power of attorney form incorrectly to influence the bank that issued the mortgage, said sources familiar with the investigation’s findings thus far.

James has denied wrongdoing, and her lawyer Abbe Lowell has criticized the criminal referral as “three pages of stale, threadbare allegations” that he called “the next salvo in President Trump’s revenge tour against Attorney General James.”

“Given the cascade of unsubstantiated allegations coming from the Trump Administration on its ‘mortgage fraud’ crusade against Democrats, it’s no surprise they are having trouble finding an objective and law-abiding prosecutor who would ignore the facts and the evidence to manufacture sham charges,” Lowell said in a statement to ABC News. “As we have repeatedly said, any impartial and non-political inquiry would conclude Attorney General James did not violate any laws managing her properties.”

A White House spokesperson declined to comment when contacted by ABC News. Representatives from the Justice Department and the Federal Housing Finance Agency did not respond to a request for comment.

The contentious investigation comes as Trump, Pulte, and Martin have accused numerous officials of engaging in mortgage fraud, with other investigations targeting Federal Reserve Governor Lisa Cook and Democratic Sen. Adam Schiff, Schiff, allegations both have denied.

Martin is also investigating James regarding a New York home, and federal prosecutors in Albany have issued subpoenas to James in connection with her civil fraud case against Trump and her corruption case against the National Rifle Association, according to multiple sources.

While Martin’s investigation of James’ Virginia properties has failed to yield clear evidence of fraud, sources said, he has taken aggressive steps to publicize the allegations and leapfrogged multiple steps usually taken by prosecutors. Last month, he sent James’ attorney a letter asking that she resign from her role as the New York attorney general, arguing it would “serve the ‘good of the state and nation'” for her to leave office.

“Her resignation from office would give the people of New York and America more peace than proceeding. I would take this as an act of good faith,” Martin wrote. 

Days after sending the letter, Martin posed for a New York Post photographer outside James’ Brooklyn home, wearing a Columbo-style trench coat. He later posted a photo from his visit on social media.

As ABC News previously reported, the visit and photo earned him a rebuke from Attorney General Pam Bondi and her deputy, Todd Blanche, who told him the trip was counterproductive and harmful to his investigation, sources said.

“[D]espite the lack of evidence or law, you will take whatever actions you have been directed to take to make good on President Trump’s and Attorney General Bondi’s calls for revenge for that reason alone,” Lowell said in a letter to Martin, a copy of which was reviewed by ABC.

The mortgage investigation has exposed cracks in the DOJ leadership and raised fresh concerns that Trump officials are seeking retribution for the ill-fated prosecutions of the president, sources said.

‘She was the fraudster’

Each of the investigations into James, Cook, and Schiff revolves around two figures in the Trump administration who have since burnished their reputations for aggressively publicizing their claims of mortgage fraud.

Pulte, the director of the Federal Housing Finance Agency and chairman of Fannie Mae and Freddie Mac, has issued the referral letters alleging the officials committed mortgage fraud, while Martin — who holds multiple titles as U.S. Pardon Attorney, Special Attorney for Mortgage Fraud, Associate Deputy Attorney General and Director of the DOJ’s Weaponization working group — has spearheaded the investigations at the Justice Department.

Before taking on his four roles, Martin briefly served as the U.S. attorney for the District of Columbia. He was the first person in recent history to run the pivotal office without any experience as a prosecutor or judge, and his tenure was marked by controversy. He dismissed dozens of prosecutors who worked on cases involving the Jan. 6 Capitol attack, defended the rioters who stormed the Capitol building, and called out potential targets of investigations on social media.

Trump withdrew Martin’s nomination for D.C. U.S. Attorney in May after he lost Senate support and instead opted to place him in the highest echelon of DOJ leadership in four influential roles that did not require confirmation.

Martin has initiated some of his investigations based on criminal referrals by Pulte, a private-equity executive whose family runs the third-largest home construction company in the United States. Pulte built a substantial public profile on social media by using Twitter to share his philanthropic work, though his outspoken presence last year prompted some members of his family to issue a statement distancing themselves from him. 

“We additionally believe that some of Bill Pulte’s public communications through social media, public appearances, interviews, self-published articles and more may suggest that he speaks on behalf of the entire Pulte family. To the contrary, Bill Pulte does not represent, nor is he a spokesperson for, all members of the Pulte family, in any capacity,” the family’s charitable foundation said in a statement last year, though it said that the nonprofit “bears no ill will towards Bill Pulte.”

Last year, in a civil case brought by James against Trump and his family business, a New York judge concluded that Trump and his family had committed a decade of business fraud by overstating the value of their properties to get favorable loan terms, fining Trump and his sons nearly half a billion dollars. An appeals court subsequently tossed the financial penalty but upheld the finding that Trump committed fraud.

Pulte, who has publicized his mortgage fraud claims about James since April, has equated the allegations against James to Trump’s civil fraud case.

“I believe this is riddled with mortgage fraud, and frankly, I think that’s why she knew so much about the law in terms of how to go after President Trump,” Pulte told Fox News last month. “She was the fraudster, not President Trump.”

‘Improper political retribution’ 

The Trump administration’s probe of James began less than a month into the president’s term when newly appointed U.S. Attorney General Pam Bondi announced the creation of a “Weaponization Working Group” headed by Martin. Among the topics the group was created to examine was James’ alleged “federal cooperation … to target President Trump, his family, and his businesses.”

One month after the Senate confirmed Pulte, he issued a criminal referral letter to the Department of Justice in April based on “media reports,” alleging that James “appears to have falsified records in order to meet certain lending requirements and receive favorable loan terms.” The allegations centered on three properties: a home in Virginia that James owns, where her niece resides; James’ Brooklyn townhouse; and her father’s house in Queens, New York.

Pulte accused James of falsifying records to claim she resided in the Virginia home in order to get better loan terms; misrepresenting the number of rooms in her Brooklyn home to meet requirements for a government-backed loan; and falsely claiming to be her father’s wife on a mortgage application in the 1990s.

“Letitia James is one of the most corrupt, shameless individuals ever to hold public office,” Deputy Chief of Staff Stephen Miller told reporters on the day the referral letter was filed. “She is guilty of multiple significant serial criminal violations.” 

Later in April, Lowell responded to each of the allegations in a fiery letter that labeled the referral Trump’s “latest act of improper political retribution.”

“U.S. Federal Housing Director William Pulte is the latest administration officer to carry out the all-too-familiar playbook of the President: praise the judicial system and those who serve it when he wins; criticize it when he loses, and attack those — attorneys and judges, alike — who are doing their jobs to protect and uphold the rule of law,” Lowell wrote.

Lowell said that the allegations about James’s homes were “cherry-picked.” Only one document related to the Virginia home — the power of attorney document that was filed so James’ niece could sign documents on her behalf — incorrectly listed the home as her primary residence, he wrote. DOJ investigators would later confirm Lowell’s claim that the POA document was the only document in James’ mortgage file that stated she would live in the home, sources said.

Regarding her Brooklyn home, Lowell argued that Pulte referenced a 24-year-old document to claim the building has five bedrooms, while all other records show it has four bedrooms. The deed for James’ fathers’ home, Lowell wrote, correctly reflects their father-daughter relationship.

“In a predictable pattern here, Director Pulte cites a mistaken May 20, 1983, document Mr. James filled out to cast his baseless allegation while again ignoring the other supporting documentation,” Lowell wrote.

‘Help Wanted’

Since federal prosecutors began looking into James’ Virginia property, they have interviewed or presented to the grand jury 15 witnesses, including insurers, loan officers, underwriters, realtors, and James’ niece.

To bring a case that she made false statements to a bank or federal financial institution, prosecutors would need to prove that James knowingly made a false statement with the intent to influence a bank. Sources tell ABC News that prosecutors have not found evidence to clear that high bar.

A loan underwriter interviewed by investigators said that, in the process of approving the loan, she never looked at or considered the power of attorney document that incorrectly listed the home as James’ primary residence, according to sources.

While Martin is examining whether another property owned by James in Virginia was inconsistently described as both “second home” and an “investment property,” sources said senior DOJ leadership believes Martin would be unable to prove any allegations beyond a reasonable doubt, in part because Fannie Mae guidelines on the issue are too vague. 

Despite his investigation failing to yield a viable case, Martin has continued to aggressively pursue the claims with Trump’s backing, sources said. He recently requested 2-3 experienced prosecutors from the U.S. attorney’s office in the Eastern Districts of Virginia and New York to help with the investigations, and he has begun personally recruiting attorneys to join his “Special Attorney Fraud Unit,” said sources.

In a recruiting email titled “Help Wanted,” Martin invited current DOJ lawyers to be “fighters for justice and goodness and the American way,” according to materials reviewed by ABC News. In his pitch, Martin invoked the words of former Attorney General and Justice Robert Jackson — who famously warned that prosecutors going after people they dislike or seek to embarrass is “the greatest danger of abuse of prosecuting power” — when he told prospective team members that “The qualities of a good prosecutor are as elusive and as impossible to define as those that mark a gentleman.”

“In a special way, the SAFU is called to hold bad actors accountable,” Martin wrote. “After all, as New York, Attorney General Leticia [sic] James said, ‘Because no matter how big, rich, or powerful you think you are, no one is above the law.'”