More than a year after New York Attorney General Letitia James won a half-billion dollar civil fraud case against President Trump, the Justice Department under Mr. Trump has launched a criminal fraud probe targeting James, multiple sources familiar with the investigation told CBS News.
The Federal Bureau of Investigation is leading the investigation.
U.S. Attorney for the Northern District of New York John A. Sarcone III told the Albany Times-Union that the investigation was “being handled at this time by main [Department of] Justice and the Albany FBI field office.”
A Justice Department spokesperson declined to comment.
The investigation began after William Pulte, director of the Federal Housing Finance Agency, wrote a letter to U.S. Attorney General Pam Bondi, alleging that James “has, in multiple instances, falsified bank documents and property records to acquire government backed assistance and loans and more favorable loan terms.”
Pulte claimed James received deals on mortgage terms by falsifying information related to multiple properties, over the course of decades. The allegations include listing a home in Norfolk, Virginia as her “principal residence” despite living and working in New York, buying a five-family property in Brooklyn with a loan that is only available for homes with four units or less, and an accusation that, in 1983, James’ father signed mortgage documents stating they were husband and wife.
James has denied the allegations, calling them “baseless.” James’ office on Thursday declined to comment.
Abbe Lowell — an attorney for James whose firm frequently represents clients that it believes have been unfairly targeted by the Trump administration — has also derided the investigation.
In a statement to CBS News, Lowell called the allegations “baseless and long-discredited” and said that the investigation “appears to be the political retribution President Trump threatened to exact that AG Bondi assured the Senate would not occur on her watch. If prosecutors are genuinely interested in the truth, we are prepared to meet false claims with facts.”
Last month, Lowell sent a letter to the Department of Justice refuting the allegations laid out in Pulte’s letter. In a letter to Bondi, Lowell called the allegations “long-disproven” and the investigation, “the latest act of improper political retribution — this time directed at Ms. James — publicly instigated and endorsed by President Trump.”
In February 2024, a New York judge ordered Mr. Trump, his company and two of his adult sons to pay the State of New York about $364 million. The figure, with interest accumulated over more than a decade, currently totals more than $500 million. Trump has appealed the ruling.
The ruling came after a lengthy civil trial in which James’ office accused Mr. Trump of spearheading an effort to use fraudulent property valuations and estimates of Mr. Trump’s net worth to obtain favorable loan rates and insurance deals he wouldn’t otherwise have gotten received.
The figure Mr. Trump was ordered to pay reflected the judge’s calculation of how much Mr. Trump and his company benefited through the scheme.
Mr. Trump has long raged against the case, and James — even suing her unsuccessfully in an effort to stop her fraud investigation before a suit could be filed by the state.
Mr. Trump was forced to take the stand in November 2023 during the trial, lashing out at James during his hourslong testimony, and calling the fraud case “a terrible, terrible thing.”
