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Justice Department Failed to secure a new indictment on Thursday new york Attorney General letitia james After a judge dismissed a previous mortgage fraud prosecution encouraged by the President donald trumpAccording to a person familiar with the matter.
Prosecutors went back to the grand jury in Virginia after a judge ruled to bar them from prosecuting James and another longtime Trump foe, the former FBI director. James ComeyOn the grounds that the US attorney presenting the case was illegally appointed.
The Justice Department could go back to the grand jury for a retry. The person spoke on condition of anonymity because they were not authorized to discuss the matter.
James was initially charged in October by the U.S. attorney appointed by the Trump administration to replace the prosecutor who resigned under pressure to bring criminal cases against Comey and James.
James denied any wrongdoing and accused the administration of using the justice system to take revenge on Trump’s political opponents.
The allegations relate to James purchasing a modest home in Norfolk, where he has family. During the sale, she signed a standard document called a “second home rider”, in which she agreed to hold the property primarily for “personal use and enjoyment for at least one year”, unless the lender agrees otherwise.
Prosecutors alleged that instead of using the home as a second residence, James rented it out to a family of three, allowing him to obtain favorable loan terms not available for investment properties.
Even if the charges are revived, the Justice Department may face obstacles in securing a conviction against James.
James’s lawyers separately argued that the case was a retaliatory prosecution brought to punish a Trump critic who spent years investigating and suing the Republican president and won a surprise verdict in a lawsuit alleging he defrauded banks by inflating the value of his real estate on financial statements. The fine was later lifted by a higher court, but both sides are appealing.
The defense also alleged “disgraceful government conduct” before his arraignment, which the defense argued should cause the case to be dismissed. The judge had not ruled on defense arguments on those matters before dismissing Lindsay Halligan’s appointment as U.S. attorney last month.
U.S. District Judge Cameron McGowan Curry took issue with the mechanism the Trump administration employed to appoint Halligan, a former White House aide who had no prior prosecutorial experience, to lead one of the Justice Department’s most elite and important offices.
Halligan was named to the office as a replacement for Eric Siebert, a veteran prosecutor and interim U.S. attorney who resigned in September amid pressure from the Trump administration to file charges against both Comey and James. She stepped down after Trump told reporters that he wanted to “fire” Siebert.
The following night, Trump said he would nominate Halligan to the role of interim U.S. Attorney and publicly urged Attorney General Pam Bondi to take action against his political opponents, saying in a Truth Social post, “We can’t delay any longer, it’s destroying our reputation and credibility” and “Justice must be served now!!!”
Comey was convicted three days after Bondi swore in Halligan, and James was convicted two weeks later.
The Justice Department defended Halligan’s appointment, but also revealed that Bondy had given Halligan a separate title of “special counsel”, possibly as a way to protect against the possibility of the prosecutions being collapsed. But Curry said such retroactive designation can’t save cases.
Although the defendants had asked to have the cases dismissed with prejudice, meaning the Justice Department would be barred from bringing them again, Curry dismissed them without prejudice — leaving open the possibility that prosecutors could attempt to file charges again.
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Richter reported from Washington.