On Friday, October 24, 2025, the AP News reported that New York Attorney General Letitia James pleaded not guilty to federal mortgage fraud charges in a Virginia court. James’ arraignment sets the stage for a contentious legal battle with the Trump administration, which she accuses of weaponizing the justice system against political adversaries.
The case stems from allegations that James made false statements on mortgage documents to secure favorable loan terms when purchasing a house in Norfolk, Virginia, in 2020. Prosecutors claim she signed a “second home rider,” agreeing to use the property primarily for personal use for at least a year. However, the indictment alleges that she rented the house to a family of three, thereby misrepresenting her intentions and obtaining loan terms not available for investment properties.
James, a Democrat, has been a vocal critic of former President Donald Trump and previously won a significant judgment against him and his companies in a civil fraud case. That case alleged Trump had inflated the value of his real estate holdings on financial statements. Although an appeals court overturned the initial fine, it upheld the lower court’s finding of fraud.
James’ legal team, led by Abbe Lowell, intends to seek a dismissal of the case, arguing that it constitutes a vindictive prosecution directed by the president. They point to the circumstances surrounding her indictment, including the removal of the U.S. attorney overseeing the investigation and Trump’s public calls for Attorney General Pam Bondi to take action against James.
Following Erik Siebert’s resignation as U.S. attorney for the Eastern District of Virginia, Lindsey Halligan, a White House aide and former Trump lawyer, was appointed and presented James’ case to the grand jury. Defense lawyers plan to challenge Halligan’s appointment, mirroring a similar challenge in a separate case involving former FBI Director James Comey, who also faces federal charges.
James’ lawyers have also requested a protective order to prevent prosecutors from disclosing information about the investigation or case materials to the news media outside of court. This motion was prompted by the revelation that Halligan had communicated with a reporter from Lawfare, a legal and national security news organization, via an encrypted messaging platform to discuss the James prosecution.
James is not the only Trump adversary facing federal charges. Former national security adviser John Bolton pleaded not guilty to charges of emailing classified information and keeping top secret documents at his home.
The Justice Department is also reportedly investigating mortgage fraud allegations against Democratic Sen. Adam Schiff of California and Federal Reserve Board member Lisa Cook, both of whom have been targeted by Trump. Schiff and Cook have denied any wrongdoing.
Leaving the courthouse, James addressed a crowd of supporters, asserting her belief in the rule of law and declaring that the indictment was politically motivated. The judge has set a trial date for January 26.
Source: AP News
