New York AG Letitia James Faces Federal Arraignment on Mortgage Fraud Charges

New York Attorney General Letitia James departed her Brooklyn brownstone Thursday, headed to Virginia where she faces a federal arraignment on mortgage fraud charges. The 67-year-old prosecutor will appear at the Walter E. Hoffman U.S. Courthouse in Norfolk Friday morning, following an October 9 indictment by a federal grand jury.

The charges against James include bank fraud and making false statements to a financial institution. According to court documents, James purchased a second home in August 2020 with a $109,600 loan that designated her as the “sole borrower to occupy and use the property.” Federal prosecutors allege the Norfolk residence “was not occupied or used” by James but “was instead used as a rental investment property” occupied by her grandniece, Nakia Thompson.

The arrangement allegedly saved James nearly $19,000 “over the life of the loan,” according to the five-page indictment filed by U.S. Attorney Lindsey Halligan in the Eastern District of Virginia.

“No one is above the law. The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public’s trust,” Halligan stated when the indictment was announced. “The facts and the law in this case are clear, and we will continue following them to ensure that justice is served.”

Financial disclosures reveal James listed the property as an “investment” in state ethics filings until May of this year—one month after President Trump’s Federal Housing Finance Agency Director William Pulte referred her to the Department of Justice for alleged mortgage fraud related to another Norfolk property purchase in 2023.

New York State financial records show James reported between $1,000 and $5,000 in rental income from her Virginia properties since 2020. However, The New York Times reported that Thompson testified to a grand jury earlier this year that she has never paid rent. Local neighbors told reporters they have never seen the Attorney General visiting the property.

In a striking coincidence, Thompson herself will appear in court two hours before James’ arraignment. The grandniece faces a hearing with an assistant principal from her child’s elementary school, who petitioned a Virginia judge for a protective order after Thompson allegedly threatened to “punch” her in the “f–king face.”

The 36-year-old Thompson, who resides in the home central to James’ indictment, is currently wanted by North Carolina authorities and has a record of arrests including assault on police officers, according to court documents.

On October 9—the same day James was indicted—Thompson reportedly became “upset and used profane language” during a phone call with assistant principal Marie Hall after one of her children received an “infraction referral.” Court documents state Thompson later appeared at the school, berating Hall and making threats that prompted officials to call police.

“Bitch, I got something for you,” Thompson allegedly threatened. “I’m still gonna punch you in the f–king face, bald-headed bitch.” A Norfolk judge has already granted Hall a preliminary protective order.

James has denied wrongdoing, calling the federal case “baseless” and describing it as politically motivated retaliation. “This is nothing more than a continuation of the president’s desperate weaponization of our justice system,” James said in a statement after the indictment. “He is forcing federal law enforcement agencies to do his bidding, all because I did my job as the New York State Attorney General.”

The case against James carries particular irony given her prominent role in pursuing a civil fraud case against former President Trump that resulted in a $500 million judgment. During that prosecution, James famously declared that “no one is above the law.”

James will be represented by Democratic powerhouse attorney Abbe Lowell, while prosecutor Roger Keller from Missouri will represent the United States.

The case highlights a complex web of legal issues surrounding James and her extended family. Thompson and other relatives living in James’ Norfolk properties have faced multiple criminal charges in recent years. Thompson was previously convicted of grand larceny in 2019 for stealing approximately $2,000 worth of merchandise from department stores, resulting in a six-month jail sentence with a five-year suspended sentence.

Court records indicate that James’ relatives residing in both Norfolk properties have collectively faced eight felony and three misdemeanor charges over the past five years, though these charges have consistently been downgraded or dismissed.