Grand jury declines to re-indict Letitia James after judge dismissed first case | Letitia James

A grand jury declined to indict Letitia James on Thursday, according to a source familiar with the matter, coming less than two weeks after a judge ruled that a similar mortgage fraud case brought by federal prosecutors against New York’s attorney general was illegal.

The Justice Department’s decision to re-present the case before a grand jury was seen as a signal of its determination to prosecute James, who has been one of Donald Trump’s main political enemies since she successfully filed a fraud lawsuit against him in New York.

James was first charged in October with one count of bank fraud and one count of making false statements to a financial institution. The charges relate to a mortgage she obtained for a home in Norfolk, Virginia, in 2020. Prosecutors say James got a cheaper mortgage rate because she indicated it would be a second home when she ended up renting it to others. The difference in rates saved him approximately $18,933 over the life of the loan. James’ niece lives in the house and reportedly told a federal grand jury earlier this year that she was not paying rent.

James said she did nothing wrong and argued that the prosecutor who handled it, Lindsey Halligan, was illegally appointed U.S. attorney for the Eastern District of Virginia. Halligan, a former White House aide and Trump ally, personally presented the case to the original grand jury that indicted James.

Halligan was appointed to the position in late September after Erik Siebert, her predecessor, was forced to resign after determining there was not enough evidence to file criminal charges against former FBI Director James Comey, another Trump rival. Comey, who was also indicted earlier this year, also argued that Halligan’s appointment was not legal.

U.S. District Judge Cameron McGowan Currie ruled in favor of James and Comey’s lawyers last month and said Halligan was illegally holding his position. U.S. attorneys must be confirmed by the U.S. Senate but can serve on an acting basis for 120 days. Once this deadline has expired, the judges of the district in which the prosecutor sits must decide who will be the lead prosecutor. Siebert had already passed the 120-day mark and district judges opted to extend his term. Once gone, Currie concluded, Trump couldn’t simply appoint someone else to fill that role.

Aside from naming issues, experts said the criminal case against James in October appeared very thin. The amount she received relative to the type of loan was so small that it generally would not warrant prosecution, former prosecutors said. The second home rider she signed with her mortgage also did not prohibit her from renting the house outright. James also indicated in documents and emails with her mortgage broker that she did not intend to use the house as her primary residence. Career prosecutors who worked on the case concluded there was not enough evidence to charge James and have since been fired.