A federal grand jury in Norfolk, Virginia, declined to indict New York Attorney General Letitia James for alleged mortgage fraud on Thursday, sources said, rejecting the Justice Department’s attempt to refile the case just ten days after a federal judge dismissed an earlier case based on the illegal appointment of the U.S. attorney in the Eastern District of Virginia.
According to sources, federal prosecutors failed to convince a majority of grand juries to approve charges that James deceived a bank to obtain favorable terms on a home mortgage.
The grand jury’s return of a “bogus bill” in the case marked an extraordinary rebuke by average citizens of the Justice Department’s attempt to bring charges against James, an adversary of President Donald Trump who has been the target of his repeated calls for his 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 beginning, the charges against me are baseless,” James said. “It is time for this uncontrolled 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 he bought in 2020 as a second home instead of an investment property to potentially save $19,000 over the life of the loan with a more favorable mortgage rate.
New York Attorney General Letitia James speaks after pleading not guilty in front of the United States District Court on October 24, 2025, in Norfolk, Virginia.
John Clark/AP
Following a direct call from Trump to prosecute James and other political adversaries, the president’s former lawyer and aide Lindsey Halligan secured an indictment against James in October, but a judge dismissed the indictment after determining that Halligan was illegally serving as a federal prosecutor in the Eastern District of Virginia.
U.S. District Judge Cameron Currie found that the attorney general lacked authority to appoint Halligan to the position under federal law, nullifying any actions taken by her, including the indictments against James and former FBI Director James Comey.
It is not immediately clear when or if prosecutors will again seek to charge Comey over allegations of making false statements to Congress in 2020. But both Comey and James have filed separate legal challenges to the allegations against them, including arguing that they were vindictively prosecuted at the direct order of President Trump, which could carry weight with judges considering whether to allow their cases to proceed to trial.
As ABC News previously reported, prosecutors investigating James for possible mortgage fraud found evidence that appeared to undermine some of the allegations in the indictment against James obtained in September, including reducing the extent to which James allegedly personally benefited from the purchase of the property.
