New York Attorney General Letitia James was indicted on federal bank fraud charges after prosecutors alleged she lied on a mortgage application to obtain favorable loan terms on a Virginia property she later rented out.
The indictment, returned by a federal grand jury, centers on a single-family home in Norfolk, Virginia, that James co-purchased in August 2020 for roughly $137,000. Most of the purchase was financed with a $109,600 loan that prohibited the home from being used as a rental or investment property, according to prosecutors.
By misrepresenting the property as a second home, James received a lower interest rate and saved “approximately $18,933 over the life of the loan,” prosecutors said in a five-page filing.
Federal Housing Finance Agency (FHFA) Director William Pulte referred the case to the Department of Justice earlier this year, prompting a criminal probe that led to Thursday’s indictment.
According to financial disclosure forms reviewed by the James repeatedly listed the Norfolk property as an “investment” from 2020 through 2023 in filings with the New York State Commission on Ethics and Lobbying in Government. In 2024, she changed the classification to “real property,” just weeks after the FHFA referral was made.
“The indicted attorney general also estimated the value of the property anywhere between $150,000 and $200,000,” the Post reported.
Despite the loan’s clear prohibition against rental use, prosecutors allege James used the property as a rental investment and earned thousands of dollars in income that she failed to report on multiple disclosure forms.
In her 2020 disclosure, James did list an “investment real property” in Norfolk that generated between $1,000 and $5,000 in revenue, but it is unclear if that referred to the same home named in the indictment.
According to prosecutors, James agreed to a “Second Home Rider” when taking out the loan, which required her to occupy the home as her secondary residence and forbade any rental or shared ownership arrangement.
“Despite these representations,” the indictment reads, “the Norfolk property was not occupied or used by James as a secondary residence and was instead used as a rental investment property.”
