Letitia James Inidcted
Counts of Bank Fraud and False Statements
Today, New York Attorney General Letitia James was indicted by an Eastern District of Virginia (Norfolk Division) grand jury for mortgage fraud and false statements to a financial institution. Read the indictment in full.
It’s not as satisfying as the Comey indictment - but it’s close.
As the public has known for quite some time, James took out a mortgage to purchase a three bedroom home in Norfolk, Virginia back in 2020. (The property is located at 3121 Peronne Avenue, Norfolk, Virginia 23509.) The purchase price was $137,000 and she financed approximately $109,600.
Under the terms of the mortgage, James was required to “occupy and use the property as her secondary residence.” According to the indictment, James was prohibited from using the property “as a timesharing or other shared ownership arrangement or agreement that requires her to either rent the property or give any other person control over the occupancy or use of the property.”
Yet James would use the property as a rental investment - evidenced by her Schedule E tax forms, which reported rental days (and zero personal use days), the thousands of dollars in rent proceeds, and deductions for property expenses.
Her misrepresentation concerning the use of the property allowed her to obtain a favorable 3.0% rate (as opposed to 3.815% for a rental), allowing her to pocket “approximately $18,933 over the life of the loan.” It’s a fairly straightforward case.
In total, James faces two counts: (1) Bank Fraud, in violation of 18 USC 1344; and (2) False Statements to a Financial Institution, in violation of 18 USC 1014.
There’s also a nice little kicker - the Government is demanding that upon James’ conviction, she forfeit “any property constituting, or derived from, proceeds obtained, directly or indirectly, as a result” of her crimes - including a $18,933 money judgment.
Payback is sweet after AG James’ unconstitutional case against Donald Trump and the Trump Organization, where James accused Trump and others of inflating the value of his net worth and real estate portfolio (and the size of respective buildings) to obtain favorable rates from banks and insurers. The causes of action in the New York lawsuit included fraud and false statements. That case resulted in an approximately half billion-dollar judgment against the Trump Organization/Trump - the judgment would later be tossed on appeal.
Like clockwork, critics accuse Trump of weaponizing the Department of Justice. As if the DOJ hasn’t long-been weaponized. Some might say that Trump is playing by their rules. James herself has demanded accountability where “powerful people cheat to get better loans.” In her own words, “There simply cannot be different rules for different people.”
But we can’t exactly admit they are playing the same way. Comey was part of an illegal spying operation that grabbed the communications of both the Trump Campaign and the Trump Administration and repeatedly lied to Congress (among other crimes), all part of an effort to get Trump out of office. James twisted New York law in an attempt to bankrupt Trump and put his company out of business. It’s more accurate to say that Trump is playing by their rules with a higher standard of ethics. Or, without their wrongdoing. Let’s not give in to the arguments of equivalency.
A final thought - this case is pending in the Eastern District of Virginia’s Norfolk Division (which includes a number of counties and cities). Here’s how that Division broke down in the 2024 election:
Chesapeake: (51.2% Harris, 47.6 Trump)
Franklin: (60.8% Harris, 37.8% Trump)
Norfolk: (69.9% Harris, 28.6% Trump)
Portsmouth: (69% Harris, 30% Trump)
Suffolk: (57.3% Harris, 41.5% Trump)
Virginia Beach: (50.3% Harris, 48.4% Trump)
Accomack County (56% Trump, 43.3% Harris)
Isle of Wight County (59.8% Trump, 39.3% Harris)
Northampton County (52.8% Harris, 46.6% Trump)
Southampton County: (62.5% Trump, 36.8% Harris)
Overall, the Norfolk Division leans Democrat. The biggest cities in his Division went to Harris - some of them, like Norfolk and Norfolk - by large margins. If we are going by party-line Demographics, then securing a conviction will be tough. But it’s a far better venue than DC or the Alexandria Division, where Comey faces trial.
THE UNITED STATES OF AMERICA
LETITIA A. JAMES.
Defendant.
FILED
IN OPEN COURT
IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF VIRGINIA
Norfolk Division
9 2023
INDICTMENT
The Grand Jury for the Eastern District of Virginia charges…
Hahahahaaaahahahaaaaahahaa!
Fine this hypocritical liar $362.8M.
Oh… $454.2M, including interest…
COUNT ONE
18 U.S.C. § 1344 (Bank Fraud)
1. Paragraphs 1 through 5 of the General Allegations are realleged and incorporated by reference as if fully set forth herein.
2. From in or about 2020, and continuing thereafter, in the Eastern District of Virginia and elsewhere, the defendant herein, LETITIA A. JAMES, did knowingly execute and attempt to execute a scheme and artifice to defraud a financial institution, that is, [Bank Name Redacted in Public Excerpts, but reported as a federally insured lender], and to obtain moneys, funds, credits, securities, and other things of value owned by and under the custody and control of such financial institution, by means of false and fraudulent pretenses, representations, and promises.
Manner and Means of the Scheme
3. It was a part of the scheme and artifice for the defendant to:
a. Submit and cause to be submitted a residential mortgage loan application to the Victim Bank for financing in connection with the purchase of real property located at [Address Redacted, but publicly identified as a single-family residence in Norfolk, Virginia, purchased for approximately $137,000 in 2020];
b. Knowingly and falsely represent in the loan application and related documents, including a Second Home Rider, that the property would be used as her “second home” for personal use and enjoyment, when in truth and fact, as the defendant then well knew, she intended to use the property primarily as an investment and rental property;
c. Sign and execute the Second Home Rider, which prohibited rental of the property for more than one year following closing without lender approval, despite her intent to rent it immediately or shortly thereafter to third parties;
d. Obtain a favorable interest rate and loan terms based on the false representation of personal use, thereby defrauding the Victim Bank of the difference in rates it would have charged for an investment property;
e. Rent the property to a family of three shortly after closing, in violation of the loan terms, generating rental income while concealing the true use from the lender.
Overt Acts
4. On or about [Date Redacted, 2020], the defendant executed the mortgage loan closing documents containing the false representations.
5. Beginning in or about [Date Redacted, within one year of closing], the defendant listed and rented the property via a real estate platform, receiving monthly rental payments exceeding $1,500.
All in violation of Title 18, United States Code, Section 1344.
COUNT TWO
18 U.S.C. § 1014 (False Statements to Financial Institution)
1. Paragraphs 1 through 5 of the General Allegations are realleged and incorporated by reference as if fully set forth herein.
2. On or about [Date Redacted, 2020], in the Eastern District of Virginia and elsewhere, the defendant herein, LETITIA A. JAMES, did knowingly make a false statement and overvalue land and property for the purpose of influencing the action of a financial institution, that is, [Bank Name Redacted], upon a loan and credit application, and any change or extension thereof, with intent to influence the action of said institution, knowing that such statement was false.
The False Statement
3. Specifically, the defendant falsely certified in the Uniform Residential Loan Application (Form 1003) and the Second Home Rider that the Norfolk property would be occupied as her second home and not used for investment or rental purposes, when, as she then and there well knew, such representation was false.
All in violation of Title 18, United States Code, Section 1014.
GENERAL ALLEGATIONS
1. At all times material to this Indictment: a. LETITIA A. JAMES, DOB [Redacted], was the Attorney General of the State of New York, residing primarily in Brooklyn, New York. b. The Victim Bank was a federally insured financial institution engaged in the business of making residential mortgage loans, with offices in Virginia. c. The Norfolk Property was a single-family residence purchased by the defendant on or about [Date Redacted, 2020], for $137,000, financed in part by a mortgage loan from the Victim Bank at a preferential rate reserved for owner-occupied second homes (approximately 0.5% lower than investment property rates, resulting in an estimated financial loss to the bank of over $600 annually).
2. The defendant, as a public official, was subject to heightened scrutiny regarding financial disclosures but failed to report the rental income from the property on required state filings.
3. The scheme caused financial harm to the Victim Bank and undermined the integrity of federally backed mortgage programs.
FORFEITURE ALLEGATION
4. Upon conviction of any offense in violation of 18 U.S.C. § 981(a)(1)(B), the defendant shall forfeit to the United States any property, real or personal, constituting or derived from proceeds traceable to the offense.
I would love to see a really good article on what the FISA warrants allowed Comey to do. It was never about Carter Page. It was about the two-hop rule: Whoever Page communicated with was fair game for "taps," and then one more hop for those people who communicated beyond Carter Page for taps. This most certainly would have included Donald Trump or someone very close to him. It's one of the most underreported stories of the entire Crossfire Hurricane effort to take down Trump.