The indictment against New York Attorney General Letitia James reveals that she repeatedly identified her Virginia residence as an “investment” property in her financial disclosures. However, she allegedly submitted false applications to banks which barred her from renting out the home.
The three-bedroom house in Norfolk, Virginia, which James acquired in August 2020, is noted in the “Property” section of her Real Estate disclosures for the years 2020 through 2023. The New York State Commission on Government Ethics and Lobbying valued this property at “less than $100,000 to $150,000.”
In her 2024 ethics filing, James labeled the Norfolk property as “real estate,” departing from her earlier classifications.
She also raised the estimated value of the property in the 2024 disclosure, increasing it from “$150,000 to less than $250,000.” This submission was made in May, just after the Director of the Federal Housing Finance Agency, William Pruitt, referred a criminal case regarding James to the Justice Department, accusing her of “falsifying records” related to a mortgage for another Norfolk property.
The reason behind her change from “investment” to “real estate” in 2024 remains unclear. Additionally, between 2021 and 2024, James did not report any income generated from the Norfolk home, which is central to the current allegations.
In her 2020 disclosure, she had indicated that the property earned income between $1,000 and $5,000, but it’s uncertain if this is the same house involved in the indictment.
The New York Attorney General’s Office and James’ lawyer have not commented on the matter.
Federal prosecutors claim that James misrepresented the property’s intended use when obtaining a $109,600 mortgage facilitated by OVM Financial and backed by Fannie Mae for a $137,000 purchase in 2020. According to the indictment, she accepted a “second home rider,” committing to occupy the property as a second residence and prohibiting rental use.
However, prosecutors argue that James did not occupy the Norfolk home but rather used it as a rental. This misrepresentation allegedly allowed her to secure a more favorable mortgage rate that wouldn’t have been available if she disclosed her intent to rent out the house, resulting in “illicit gains” estimated at around $18,933 over the mortgage’s duration.
Furthermore, James also reportedly misrepresented the property’s use on her homeowner’s insurance application as “owner occupied,” while on her federal tax returns, she treated it as a “rental property,” claiming rental income and deductions for related expenses.
She faces charges of bank fraud and making false statements to a financial institution. If found guilty of both, James could face up to 60 years in prison and fines reaching $2 million.
Her first court appearance is scheduled for October 24th in federal court in Virginia.
Legal experts estimate that her defense could cost between $5 million and $10 million. Although New York has a $10 million taxpayer-funded legal defense fund that could assist her, her office maintains she won’t utilize it.
James, who has been in office since 2018 and earns an annual salary of $220,000, is primarily relying on the National Democratic Lawyers Association to help cover her legal expenses. Notably, her attorney, Abby Rowell, could charge over $1,000 per hour and potentially require a $1 million retainer.
However, some lawyers, supporting James as a Democrat, might be willing to handle the case pro bono due to its high profile and the political climate.
