Letitia James pleads not guilty in Virginia mortgage fraud case | Trump administration

New York state attorney general Letitia James on Friday dismissed bank fraud and perjury charges brought after Donald Trump called for charges against her in a move widely seen as political revenge.

“He’s a not guilty judge either way,” James told the judge during his first appearance in federal district court in Virginia. The case was assigned to Judge Jamar Walker, who was nominated by Joe Biden.

The five-page indictment against James accused James of claiming in loan documents that he would use a house he purchased in Norfolk, Virginia, as a secondary residence to obtain more favorable loan terms, when in fact he was using it as an investment property.

But the charges, filed by Trump’s handpicked US attorney Lindsey Halligan, came over objections from career prosecutors who believed there was insufficient evidence to prove the case beyond a reasonable doubt and said James did not profit financially from the loan.

James is expected to file a motion to dismiss the indictment soon on the grounds that Halligan was improperly appointed and that the entire case should be dismissed because he filed the charges alone, according to court filings.

The impeachment comes at a tumultuous time for the justice department, which finds itself under constant pressure from Trump and other administration officials to pursue cases against their perceived political enemies, regardless of the strength of the underlying evidence.

Before filing an indictment against James, Halligan also filed charges against former FBI director James Comey at the president’s express request. The ministry also launched an investigation into California senator Adam Schiff and former CIA director John Brennan.

Typically, the department brings criminal cases in which prosecutors have a high level of confidence that they can win at trial and sustain a conviction on appeal. But that test was almost certainly not met in the James case, former prosecutors said.

In a memo sent to Halligan’s U.S. attorney, Erik Siebert, before he was abruptly fired by Trump last month, career prosecutors said there was conflicting evidence about whether James’ actions amounted to fraud, according to a person familiar with the matter.

While the indictment alleged that James earned thousands of dollars in rental income, prosecutors said they found evidence that he allowed relatives to live rent-free in the Norfolk home he bought for $137,000 in 2020.

They also found no evidence that James had charged relatives for use of the property other than the $1,350 that James disclosed on his 2020 tax return; It was said that this payment was to cover public services.

Prosecutors expressed concern that the vague language of federal mortgage rules would make it difficult to prove James acted with the requisite criminal intent. Fannie Mae rules do not clearly state whether the term “occupied” means sleeping in a home at night or simply visiting.

While the charges accuse James of “not occupying” the home because he never stayed the night, James also told loan officers and real estate agents that the home was for his nephew.

James’ lead defense attorney, Abbe Lowell, previously said his client denies any wrongdoing.

“We are deeply concerned that this case stems from President Trump’s desire for revenge. For a president to publicly bring charges against someone – when his career lawyers have reportedly concluded that none of them were in the right – this is a serious assault on the rule of law,” he said.

James has been one of Trump’s main targets since 2018, when he went after him in his campaign to become New York state attorney general. Shortly after taking office, she launched an investigation against him, accusing him of fraudulently inflating the value of his assets.

After a month-long trial, James won a civil verdict that ultimately amounted to more than $500 million. A New York state appeals court threw out the fine, saying it violated the U.S. Constitution’s ban on “excessive” financial penalties, but the conviction remained.