More than a year after New York Attorney General Letitia James won a half-billion-dollar civil fraud case against President Trump, the Trump administration’s Justice Department has launched a criminal fraud investigation against James, according to multiple sources familiar with the matter.
The Federal Bureau of Investigation is overseeing the investigation.
U.S. Attorney for the Northern District of New York John A. Sarcone III told the Albany Times-Union that the investigation was “being handled at this time by the main [Department of] Justice and the Albany FBI field office.”
A Justice Department spokeswoman declined to comment.
The investigation began after William Pulte, director of the Federal Housing Finance Agency, wrote a letter to U.S. Attorney General Pam Bondi alleging that James “has, in multiple instances, falsified bank documents and property records to acquire government-backed assistance and loans and more favorable loan terms.”
Pulte claimed James received mortgage deals by falsifying information about multiple properties over several decades. The allegations include listing a home in Norfolk, Virginia as her “principal residence” despite living and working in New York, purchasing a five-family property in Brooklyn with a loan that is only available for homes with four or fewer units, and claiming James’ father signed mortgage documents stating they were husband and wife in 1983.
James has denied the allegations, describing them as “baseless.” On Thursday, James’ office declined to provide comment.
Abbe Lowell, an attorney for James whose firm frequently represents clients who she believes have been unfairly targeted by the Trump administration, has also criticized the investigation.
In a statement to CBS News, Lowell called the allegations “baseless and long-discredited” and said that the investigation “appears to be the political retribution President Trump threatened to exact,” which AG Bondi assured the Senate would not happen under her watch. “If prosecutors are truly interested in the truth, we are willing to confront false claims with facts.”
Last month, Lowell wrote to the Department of Justice, refuting the allegations made in Pulte’s letter. In a letter to Bondi, Lowell described the allegations as “long-disproven” and the investigation as “the latest act of improper political retribution — this time directed at Ms. James — publicly instigated and endorsed by President Trump.”
In February 2024, a New York judge ordered Mr. Trump, his company, and two adult sons to pay the State of New York approximately $364 million. After more than a decade of interest, the figure now exceeds $500 million. Trump has appealed the decision.
The decision followed a lengthy civil trial in which James’ office accused Mr. Trump of leading an effort to obtain favorable loan rates and insurance deals that he would not have received otherwise.
The amount Mr. Trump was ordered to pay reflected the judge’s calculation of how much Mr. Trump and his company profited from the scheme.
Mr. Trump has long been outspoken against the case and James, even suing her unsuccessfully to halt her fraud investigation before the state could file a lawsuit.
Mr. Trump was forced to take the stand during the trial in November 2023, lashing out at James during his hours-long testimony and describing the fraud case as “a terrible, terrible thing.”
