The U.S. Justice Department is examining multiple real estate transactions involving state Attorney General Letitia James that date back decades, after receiving a criminal referral on Monday from the director of the U.S. Federal Housing Finance Agency. (Photo by Spencer Platt/Getty Images)
Spencer Platt/Getty Images
ALBANY — The U.S. Justice Department is examining multiple real estate transactions involving state Attorney General Letitia James that date back decades after receiving a criminal referral on Monday from the director of the U.S. Federal Housing Finance Agency.
Many of the transactions involve property purchases that would likely fall outside the federal statute of limitations, although the referral also raises questions about James’ assertions in loan documents related to her 2023 purchase of a residence in Virginia.
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In a three-page letter sent this week to U.S. Attorney General Pam Bondi, the housing agency’s director, William J. Pulte, alleged that James may have “falsified bank documents and property records to acquire government backed assistance and loans and more favorable loan terms.”
He said the alleged conduct “potentially included … falsifying residence status for a Norfolk, Virginia-based home in order to secure a lower mortgage rate and … misrepresenting property descriptions to meet stringent requirements for government backed loans and government assistance.”
Pulte alleged that in mortgage documents filed in Virginia, James “reaffirmed this (Norfolk residence) would be her primary residence, despite being a statewide public office holder in the state of New York at that same time and primarily residing in the state of New York.”
Pulte noted that mortgage rates for primary residences tend to be lower than those for secondary residences.
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“Primary residence mortgages receive more favorable loan terms, including lower interest rates, than secondary residence mortgages,” he said in the letter. “Lenders view secondary residence mortgages as significantly riskier, as a borrower is more likely to continue paying off a primary residence mortgage during any financial hardship.”
The other property transactions cited in Pulte’s letter related to James’ 2001 purchase and subsequent management of a five-unit residential building in Brooklyn that she still owns.
Pulte asserted that James obtained a “conforming loan through the Fannie Mae/Freddie Mac” that was only available for properties with four units or less. Records also indicate that James has “consistently misrepresented the same property as only having four units in both building permit applications and numerous mortgage documents and applications,” Pulte said.
Pulte said her claims that the building had four units and not five was repeated in the attorney general’s 2011 application to participate in the Home Affordable Modification Program, and also a 2019 mortgage refinancing through a Fannie Mae and Freddie Mac lender.
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Fannie Mae and Freddie Mac are government-created enterprises that were established by Congress to purchase mortgages and bundle them into securities that are sold to investors to ensure banks can continue lending in order to stabilize the housing market.
In a statement, a spokesman for James accused the administration of President Donald J. Trump of weaponizing “the federal government against the rule of law and the Constitution.”
“She will not be intimidated by bullies — no matter who they are,” added the spokesman, Geoff Burgan.
On the Brooklyn property, which the Times Union had confirmed last year had separate utility service boxes for five units, Pulte said James had received a “conforming loan,” which is a Fannie Mae and Freddie Mac-backed mortgage that has favorable interest rates and terms that are intended to be available “to lower- and middle-income borrowers.”
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“Conforming single-family loans are subject to a cap of four dwellings per property,” he wrote. “A building that exceeds four units must be treated as a multifamily property, and typically has larger down payment requirements and higher interest rates terms — with interest rates being between 0.75-1 percent higher — due to lenders viewing multifamily loans as significantly riskier.”
Pulte also cited the the Home Assistance Modification Program, which was implemented in 2008 to provide homeowners at risk of foreclosure with reduced monthly mortgage payments. He said the program is limited to properties with four units or less.
“It appears that Ms. James may have listed the Brooklyn … property as four units instead of five units in order to meet the conforming loan requirements, and thus receive better interest rates,” Pulte wrote. “Ms. James also appears to have used this same falsification in order to receive mortgage assistance through (the Home Assistance Modification Program).”
Referring to both the Virginia residence and the Brooklyn multi-family dwelling, Pulte wrote that James “appears to have falsified records in order to meet certain lending requirements and receive favorable loan terms.”
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He asserted that the allegations could be violations of federal statutes governing wire fraud, mail fraud, bank fraud or making false statements to a financial institution.
Many of the documents cited by Pulte and attached to his letter to the Justice Department were provided to the Times Union last year by a man who gave the newspaper a fictitious name. He had claimed that he was part of a “group” that had begun delving into James’ property records because they were upset their friend had committed suicide while he was under investigation by the attorney general’s office for mortgage fraud.
A spokesman for the attorney general’s office previously told the Times Union that it had no record of a person committing suicide while under investigation by their office.
The man who contacted the Times Union — through email, regular mail and by telephone — had used a phone number that was listed as a contact number in a legal notice two years ago for a Long Island man who is being actively prosecuted by the attorney general’s office for fraud. An attorney for that man, whose criminal case is pending in New York County, did not respond to a request for comment. The man who had used the phone number to call the Times Union denied knowing the person who is being prosecuted by the attorney general’s office for fraud.
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The trove of property records he provided to the Times Union last year included documents related to the 1983 purchase of a residence in Queens by James and her father. Those records include mortgage documents in which James was listed as the “wife” of her father, which the man who provided the records alleged could have enabled them to receive financing incentives that would only be available to a married couple.
In December, in response to questions from the Times Union about the property transactions, an official with the state attorney general’s office downplayed the significance of the more than 40-year-old property records that had listed James as her father’s spouse. The official said James and her father later sold the house in Queens, and that she used the proceeds from that sale to purchase the multi-family unit in Brooklyn.
“That was a clerical error on the part of either the title company or the bank, but was flagged and fixed … like 30 years ago,” the official said. “This isn’t a story at all; this is just a couple of either misunderstandings or disparate connected events.”
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(The Times Union is not identifying the official because they agreed to speak candidly about the property records and said at the time the office would provide a formal response to the newspaper’s inquiry. However, the attorney general’s office never provided a formal, written response to the Times Union despite repeated requests over the past several months.)
In a subsequent interview, the official said that under Federal Housing Administration regulations, “there’s no benefit to being a spouse or a daughter, and the deed itself has it down (listing James) as ‘daughter.’”
Regarding the Brooklyn property, the official said in that second interview in December that for tax purposes there is no distinction between a residential unit in New York that has four or five units.
“A five-unit, five-family residence is taxed at the same rate as a four-family residence,” the official said.
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In Pulte’s criminal referral letter sent to Bondi this week, he did not mention the property transactions involving James’ 1983 purchase of a residence with her father, but includes a copy of that mortgage as an attachment. His letter only cited transactions from the Brooklyn multi-unit property and the residence in Norfolk. But he highlighted the potentially favorable mortgage rates for properties that have four or fewer units as opposed to those with five or more units.
The man who contacted the Times Union last year said his group had turned over many of the records they had uncovered to elected officials as well as to other news organizations.
On the Brooklyn property, he said, “We sent investigators to speak to the sellers of the property and then talk to people over there. They said that they sold a five-family dwelling (to James), not a four.”
He had said a five-unit dwelling would have required a commercial mortgage rather than a residential mortgage.
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The Justice Department’s examination of James’ property and loan transactions comes after her office has aggressively investigated Trump since his first term.
Last year, in a civil case filed against Trump by the state attorney general, a judge ordered the then-former president, his two sons and a former Trump company official to pay a more than $360 million penalty for “ill-gotten gains.” The penalty was imposed after the Trump Organization was found liable by a Manhattan jury for allegations that Trump had lied about his wealth and overstated property values in documents to secure loans that helped build his real estate empire.
Trump has appealed the verdict and the penalty.
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In a post Monday on the Truth Social platform, Trump wrote: “Letitia James, a totally corrupt politician, should resign from her position as New York State Attorney General, IMMEDIATELY. Everyone is trying to MAKE NEW YORK GREAT AGAIN, and it can never be done with this wacky crook in office.”
