Federal Criminal Indictment for Bank Fraud and False Statements (critical) New York Attorney General Letitia James was criminally indicted by a federal grand jury on charges of bank fraud and making false statements to a financial institution. The charges relate to her Virginia property, where prosecutors allege she secured a favorable mortgage by misrepresenting the property as a secondary residence, rather than a rental investment, saving approximately $18,933.. Special Prosecutor Appointed for Mortgage Fraud Investigation (critical) Special Prosecutor Ed Martin was appointed to lead a federal investigation into alleged mortgage fraud against Letitia James (and Adam Schiff). The investigation centers on allegations of falsifying mortgage documents to obtain preferential loan terms, including misrepresenting the Brooklyn property unit count and falsely claiming the Virginia home as her 'principal residence' while serving as NY AG.. False Residency Claim on Virginia Mortgage Documents (critical) In 2023, James allegedly signed mortgage documents for a Norfolk, Virginia property, including a sworn affidavit, stating she intended to occupy the home as her 'principal residence.' At the time, she was actively serving as New York's Attorney General and residing in Brooklyn. This misrepresentation was cited in a criminal referral to the DOJ and an ethics complaint, as it allowed her to secure favorable financing and potentially violated NY constitutional residency requirements.. Systemic Failure to Disclose Mortgages on Financial Statements (2020-2023) (high) James demonstrated a pattern of financial disclosure failures, violating NY Public Officers Law. Examples include: 1) The documented OVM Financial mortgage ($109,600) used to purchase the Virginia investment property in 2020 was never disclosed. 2) Two large mortgages (Freedom Mortgage $150K-$250K; National Mortgage $100K-$150K) were reported in her 2023 disclosure for the Virginia property but do not appear in public property records (phantom mortgages). 3) A Citibank mortgage (recorded Aug 2019) was not disclosed until 2022, then vanished from the 2023 disclosure without explanation or satisfaction filing.. Misrepresentation of Brooklyn Property Unit Count for Loan Eligibility (high) James allegedly misrepresented her Brooklyn property's occupancy status across multiple filings. Although the official Certificate of Occupancy (2001) listed it as a five-family dwelling, she repeatedly described it as a four-family dwelling (or fewer) in legal and financial instruments, including a 2001 1–4 Family Rider and a 2011 HAMP modification where '4 fam' was handwritten. This distinction was critical for qualifying for federal mortgage assistance (HAMP) intended for properties with four or fewer units.. Implausible Loan-to-Value Ratio on Investment Property (high) The Virginia investment property (valued at $100,000-$150,000) was reported in 2023 disclosures with mortgages totaling up to $400,000 (plus the undisclosed $109,600 OVM loan), resulting in a potential total debt of up to $509,600. This yields a loan-to-value ratio potentially as high as 272%, far exceeding the industry standard (70-80%) for investment properties, suggesting highly irregular financing.. Failure to Disclose Rental Income (2007-2011) (medium) While serving on the City Council, James failed to disclose substantial rental income (tens of thousands of dollars annually) from her Brooklyn brownstone between 2007 and 2011, despite explicit city laws requiring disclosure. She only filed an amended disclosure after media scrutiny in May 2013, and even then, she reportedly understated the actual income ($44,400).. Uncorrected DOB Violation on Brooklyn Property (medium) The Brooklyn property (296 Lafayette Avenue) has an uncorrected Department of Buildings (DOB) Violation (#112100C02EM02) issued on November 21, 2000, for 'altered building occupied without a valid Certificate of Occupancy.' The violation remains open on city books two decades later, despite James purchasing the property in March 2001.