For the second time in recent days, a federal grand jury in Virginia declined to indict New York Attorney General Letitia James for alleged mortgage fraud, sources said.
The grand jury rejected the Justice Department’s attempt to refile the case after a federal judge dismissed an earlier case based on the illegal appointment of the U.S. attorney in the Eastern District of Virginia.
On Thursday, federal prosecutors failed to convince a majority of grand juries to approve charges that James deceived a bank to obtain favorable terms for a mortgage loan, according to sources.
The charges were presented to a grand jury in the Alexandria branch of the Eastern District of Virginia after a grand jury in Norfolk, Virginia, rejected the charges last week.
A Justice Department spokesperson did not immediately respond to a request for comment from ABC News.
“This unprecedented rejection makes it even clearer that this case should never have seen the light of day,” James’ attorney, Abbe Lowell, said in a statement. “Career prosecutors who knew better refused to bring them, and now two different grand juries in two different cities have refused to allow these baseless charges to be brought. Any further attempt to revive these discredited charges would make a mockery of our justice system.”
Prosecutors have alleged that James, who successfully brought a civil fraud case against now-President Donald Trump last year, falsely listed a home he purchased in 2020 as a second home instead of an investment property to potentially save $19,000 over the life of the loan with a more favorable mortgage rate.
New York Attorney General Letitia James speaks outside a federal courthouse in Norfolk, Virginia, on Oct. 24, 2025.
Eric Lee/Bloomberg via Getty Images
As ABC News previously reported, prosecutors investigating James for possible mortgage fraud found evidence that seemed to undermine Some of the allegations in the indictment against James were obtained in September, including the extent to which James allegedly personally benefited from the purchase of the property.
James has denied any wrongdoing.
This is a developing story. Please check back for updates.
