Grand jury rejects DOJ’s attempt to revive fraud case against New York AG Letitia James: Sources

A federal grand jury in Norfolk, Virginia, refused to indict New York Attorney General Letitia James for alleged mortgage fraud on Thursday, sources said, rejecting the Department of Justice’s attempt to refile the case just ten days after a federal judge dismissed an earlier case based on the unlawful appointment of the U.S. attorney in the Eastern District of Virginia. 

Federal prosecutors failed to convince a majority of grand jurors to approve charges that James misled a bank to obtain favorable terms on a home mortgage, according to sources. 

The grand jury’s return of a “no true bill” in the case marked an extraordinary rebuke by average citizens of the Department of Justice’s attempt to bring charges against James, an adversary of President Donald Trump who has been the target of his repeated calls for prosecution. 

A Justice Department representative declined to comment.

James, in a statement, said she was grateful to the members of the grand jury.

“As I have said from the start, the charges against me are baseless,” James said. “It is time for this unchecked weaponization of our justice system to stop.”

Prosecutors have alleged that James, who successfully brought a civil fraud case against Trump last year, falsely listed a home she purchased in 2020 as a second home instead of an investment property in order to save potentially $19,000 over the life of the loan with a more favorable mortgage rate. 

Following a direct call from Trump to prosecute James and other political adversaries, the president’s former attorney and aide Lindsey Halligan secured an indictment against James in October, but a judge dismissed the indictment after determining that Halligan was unlawfully serving as the U.S. attorney in the Eastern District of Virginia. 

U.S. District Judge Cameron Currie concluded that the attorney general lacked the authority to appoint Halligan to the post under federal law, nullifying any actions taken by her including the indictments against both James and former FBI director James Comey. 

It’s not immediately clear when or if prosecutors will again seek to charge Comey on allegations of making false statements to Congress in 2020. But both Comey and James leveled separate legal challenges to the indictments against them, including the argument they were vindictively prosecuted at the direct orders of President Trump, that could carry weight with judges considering whether to let their cases go forward to trial. 

As ABC News previously reported, prosecutors who investigated James for possible mortgage fraud found evidence that appeared to undercut some of the allegations in the indictment of James secured in September — including reducing the degree to which James allegedly personally profited from her purchase of the property.