Trump vs. NY AG Letitia James: What's behind the fraud accusations in an ongoing feud

A top housing official in President Donald Trump’s administration referred New York Attorney General Letitia James for criminal prosecution this week, escalating a bitter feud and leading James’ allies to accuse Trump of political retribution.

Federal Housing Finance Agency Director William Pulte sent a letter to the U.S. Department of Justice arguing that James — a Democrat who has battled Trump, his family and their businesses in the courts — may have committed fraud herself.

James and her allies, in turn, accused Trump of trying to weaponize the justice system to attack his personal enemies.

Here’s what you need to know:

What is Letitia James accused of?

The Trump administration is accusing James of potential fraud in connection with two properties.

One is a 1,450-square-foot, three-bedroom home in Norfolk, Virginia. James and her niece co-signed on a $219,780 mortgage for the property in 2023. Both signed a notarized document that claimed: “I HEREBY DECLARE that I intend to occupy this property as my principal residence.”

James lives in Brooklyn — in the second property at the center of Pulte’s complaint.

Pulte’s letter accuses James of understating the number of units in her Clinton Hill brownstone by listing it as a four-unit property on various forms, when a 2001 certificate of occupancy lists it as a five-unit property.

In both cases, Pulte claims James’ statements are untrue. He suggests they could have helped her receive lower interest rates on her property loans, which he says could be fraudulent.

“Ms. James, for both properties listed above, appears to have falsified records in order to meet certain lending requirements and receive favorable loan terms,” Pulte wrote.

What does James have to say about it?

James’ office pushed back on the notion that she’s done anything wrong and accused the Trump administration of "weaponizing" the federal government and using “cherry-picked” information to attack her.

“The allegations are baseless,” James said in an interview Thursday with NY1. “The allegations are nothing more than a revenge tour.”

Her office says she has always maintained her Brooklyn property is a four-unit, owner-occupied building and the 2001 certificate of occupancy was filed by a prior owner.

The certificate filed with the city Department of Buildings lists five units in the 152-year-old rowhouse, including two on the top floor. But city finance records classify the building as a four-unit property.

The Virginia property, meanwhile, is occupied by James’ niece — the other person who signed the mortgage documents, according to the AG’s office.

A clause in the actual mortgage documents says the borrower — James and her niece — shall establish the property as their “principal residence within 60 days” and continue to occupy it for at least a year. But it also says the lender can waive the requirement if it “shall cause undue hardship for the borrower,” or if there are extenuating circumstances beyond the borrower’s control.

The lender — American Neighborhood Mortgage Acceptance Company, better known as Annie Mac — did not immediately return a request for comment.

Could James face penalties?

Real estate attorneys who spoke with Gothamist said the situation is complicated and requires more information to assess.

Natalia Sishodia, a Manhattan-based real estate attorney who represents lenders, said she found it "surprising" that James would sign the document claiming the Virginia property as her primary address given her position as an attorney and public official. But she said the seriousness of the matter could depend on whether James or her family member received an actual benefit, like a lower mortgage rate.

“I would want to know what benefit she actually received by providing the wrong information on the mortgage document," Sishodia said. "If it led to some benefit, then it could be potential fraud because no one can provide untruthful information or false information on the mortgage documents.”

Real estate attorney Michael J. Fichera Jr., a partner at Avenue Law Firm, said James’ signature on the Virginia mortgage document seems to be a more “salient issue” than the Brooklyn unit count.

“If the allegations are correct, and we have to take everything with a grain of salt, it could be a legitimate issue for her,” Fichera said. “If you’re buying something as an investment, your loan terms are different and your rates are higher.”

But he noted that if James’ niece lives there, that could mean that everything was done above board.

“If that’s the case, it could be a valid defense,” Fichera said.

Is this political retribution?

James and her allies are making that case.

Trump and James have been adversaries since at least 2018, when James pledged to investigate Trump and his New York-based business as part of her successful campaign for attorney general.

James went on to bring numerous cases against Trump and his business, and she inherited a case against Trump’s charity from her predecessor. In a civil case James pursued, a judge ordered Trump to pay more than $450 million in penalties for inflating the value of his net worth to get better terms on loans. Trump is appealing.

New York City Council Speaker Adrienne Adams, an ally of the attorney general and a candidate for mayor, came to James’ defense on Wednesday.

“Letitia James has spent her career standing up to powerful interests and fighting for everyday New Yorkers,” Adams said in a statement. “Now she’s being targeted by a president who abuses the power of the federal government to go after his enemies.”

Trump himself, meanwhile, has long accused James of going after him for political purposes, dating back to her 2018 campaign that came in the midst of his first presidential term.

“Letitia James, a totally corrupt politician, should resign from her position as New York State Attorney General, IMMEDIATELY,” Trump posted on his Truth Social platform this week. “Everyone is trying to MAKE NEW YORK GREAT AGAIN, and it can never be done with this wacky crook in office.”

On NY1, James said she would not litigate the case in the media.

“We will respond to these allegations at the appropriate time and in an appropriate way,” she said.

The Department of Justice has already prosecuted another high-ranking state attorney for mortgage fraud.

Last year, a federal judge sentenced former Baltimore State Attorney Marilyn Mosby to three years of house arrest and probation after a jury found she had improperly withdrawn money from a deferred compensation plan, used it to purchase investment property in Florida and falsely claimed a $5,000 payment was a gift from her then-husband.

This story has been updated with comments from Attorney General Letitia James.