New York Attorney General Letitia James Indicted is accused of repeatedly categorizing her Virginia residence as an “investment” property in her financial disclosures, while allegedly providing misleading information to a bank to secure a mortgage that prohibited renting the property.
The three-bedroom home in Norfolk, Virginia, which James purchased in August 2020 and was mentioned in a federal grand jury indictment, appears as an “investment” in her 2020, 2021, 2022, and 2023 disclosures to the New York State Commission on Ethics and Lobbying, with an estimated value of “$100,000 to under $150,000.”
However, in her 2024 ethics filing, James changed the designation of her Norfolk property from “investment” to “real property.”
Additionally, she increased the estimated value of the home to “$150,000 to under $250,000.”
The 2024 disclosure was submitted in May, following a criminal referral to the Justice Department from Federal Housing Finance Agency (FHFA) Director William Pulte, which accused James of “falsifying records” to acquire home loans for another property in Norfolk, Virginia.
The rationale behind James’s change from “investment” to “real property” in her 2024 disclosure remains unclear.
James’s ethics documents from 2021-2024 showed no income generated from the home at the heart of the indictment.
In her 2020 disclosures, she indicated that an “investment real property” in Norfolk earned between $1,000 and $5,000 in income, but it remains uncertain if this property is the one mentioned in the indictment.
The New York attorney general’s office and James’s attorney have not responded to inquiries from The Post.
According to the indictment, federal prosecutors claim James misrepresented her intended utilization of the property to secure a $109,600 mortgage loan from OVM Financial, backed by Fannie Mae, for the $137,000 home she acquired in 2020.
James reportedly accepted a “Second Home Rider” when obtaining the loan, which mandated her to “occupy and use the property as her secondary residence,” prohibiting arrangements that would allow her to rent out the place or give others control over its use.
Prosecutors assert that despite these claims, the Norfolk residence “was not occupied or used by James as a secondary residence, but was instead utilized as a rental investment property.”
This “misrepresentation” enabled James to acquire a mortgage rate that would have been unavailable had she disclosed her intent to rent the home, according to the DOJ.
Prosecutors allege that her “ill-gotten gains” from the more favorable mortgage rate total approximately “$18,933 over the loan’s duration.”
James further misrepresented her intended use of the property on a homeowners’ insurance application, which stated that the residence would be “owner occupied.”
However, on her federal tax forms, James classified the Norfolk home as “rental real estate,” reporting “thousands of dollars in rents received” and “claiming deductions for property-related expenses,” according to the indictment.
James faces charges of bank fraud and providing false statements to a financial institution.
Should she be convicted on both charges, James could face up to 60 years in prison and fines reaching up to $2 million.
Her initial appearance in federal court in Virginia is scheduled for October 24.
Stay informed with the latest updates
Morning Report brings you the latest news, videos, photos, and beyond.
Thank you for subscribing!
Experts predict that James could incur up to $10 million in legal fees while defending against the accusations.
A former prosecutor, Neama Rahmani, estimated that total costs could be between $5 and $10 million.
The State of New York has established a taxpayer-funded $10 million legal defense fund available to James, although her office has asserted that she will not utilize it.
The office of the state comptroller confirmed that none of the funds from the $10 million account has been utilized.
James, who was first elected in 2018 with an annual salary of $220,000, is turning to the national Democratic Attorneys General Association for assistance with her legal defense costs.
Abbe Lowell, a notable defense attorney who is representing James, may charge over $1,000 per hour and has already requested a $1 million retainer based on prevailing rates for top lawyers, according to Rahmani.
Some attorneys may also consider taking the case pro bono due to its high-profile nature and the political leanings of some left-leaning lawyers who may wish to support James, a Democrat.
“I believe many outstanding attorneys would be willing to volunteer their services for this case,” remarked former prosecutor Duncan Levin.
