New York attorney general pleads not guilty to mortgage fraud charges

NORFOLK, Va. (CN) — New York Attorney General Letitia James pleaded not guilty to federal mortgage fraud claims made by the Trump administration on Friday, paving the way for a trial in January.

James appeared in a Virginia-based federal courthouse surrounded by supporters. U.S. District Judge Jamar Walker, a Joe Biden appointee, set the trial date for Jan. 26.

“I believe that justice will rain down like water and righteousness like a mighty stream,” James told supporters after the hearing. “I will not be deterred. I will not be distracted.”

Interim U.S. Attorney Lindsey Halligan of the Eastern District of Virginia obtained an indictment on Oct. 9, accusing James of using falsified records to secure favorable loans on a Norfolk home she bought in 2023. James, a Democrat and vocal critic of Donald Trump, previously accused him of going on a “revenge tour” by using the presidency to target political opponents.

The Justice Department says James bought a three-bedroom house for $137,000 with a $109,600 loan from Old Virginia Mortgage in 2020; the loan required James, as the sole borrower, to occupy and use the property as her second residence.

After her arraignment, James filed a motion to dismiss the indictment. Her attorney, Abbe Lowell, said she will join former FBI Director James Comey, also challenging the legality of Halligan’s appointment, in a motion to invalidate it. U.S. District Judge Cameron Currie of South Carolina, a Bill Clinton appointee, will hear arguments Nov. 13.

James further accuses Halligan of breaking court procedure by communicating with a reporter.

“Proactive intervention by this court is necessary to protect Attorney General James’ constitutional rights and the integrity of this court’s procedures,” James wrote in her motion to dismiss.

Lowell and attorney Roger Keller, representing the United States, quibbled over the purported incident, with Keller arguing that both parties should keep a log of all communications with the media because James has spoken at multiple press conferences.

“The defendant has also been active on the internet,” Keller said.

Lowell claimed that James, a defendant, doesn’t have to follow the same rules as an attorney.

Keller told Walker that he had eight to ten witnesses and expected the trial to take two weeks. Walker disagreed with Keller’s assessment and said the trial would last no more than five days.

Walker admonished Keller for the government’s failure to produce discovery before the arraignment, thereby giving James insufficient time to file her opposition brief. Keller asked Walker to set the discovery deadline for Nov.14. Walker asked counsel for both parties to meet and discuss an expedited timeline.

“November 14 seems a little a far out,” Walker said. “November 14 is not consistent with how this court operates.”

Lowell said that James would also urge dismissal for claims of a vindictive prosecution and for the government’s failure to correctly label the charges in the indictment. Walker scheduled hearings for Dec. 5 and Dec. 17.

James faces two counts: bank fraud and making false statements to a financial institution, each carrying a maximum of 30 years in prison and a $1 million fine. The court imposed no conditions on her bond.

Dozens of supporters with anti-Trump signs greeted James outside the courthouse. Trump previously dismissed U.S. Attorney Erik Siebert of the Eastern District of Virginia for his unwillingness to prosecute her. James has filed more than a dozen suits against Trump.

She became one of Trump’s chief adversaries after her civil fraud case against his business empire successfully found that he had inflated his financial statements to appear wealthier to banks, insurers and the media.

“This is not about me,” James said. “This is about all of us, and about a justice system which has been weaponized. A justice system which has been used as a tool of revenge.”