The indictment of Letitia James and the collapse of impartial justice
“One level of justice for all Americans,” said US Attorney Pam Bondi. books Thursday on X, shortly after a federal grand jury in Virginia indicted New York Attorney General Letitia James on charges of bank fraud and making false statements. Bondi had raised a similar point two weeks ago, after former FBI Director James Comey was indicted. “No one is above the law,” she declared. This sense of convincing triumph misunderstands the danger posed by the prosecution of James and Comey – and the other cases that President Donald Trump has called for against his political opponents, and that may soon follow. The problem here, contrary to the administration’s framework, is not that these individuals have previously evaded accountability for alleged criminal activity. (Those who are concerned about the ability of the powerful to circumvent the law should point to Trump v. United States, in which the Supreme Court granted presidents near-total immunity from criminal prosecution for their official actions. It turns out that some people are actually above the law.) Instead, the problem with Trump’s prosecutions is a different, and more damaging, form of unequal treatment: that this administration will use the justice system to selectively punish those who bear responsibility. The president got angry. The essence of impartial justice is to treat identical behavior alike, not to identify the target and then find the crime.
Trump’s supporters often insist that it was Democrats, including James, who used the judicial system against him first. In fact, while running for attorney general in 2018, James had some reckless and ill-advised words for Trump. “I will never be afraid to challenge this illegitimate president,” she vowed. After her election, her comments were even more pointed, perhaps even inappropriate for a law enforcement official: “As the next attorney general in his home state, I will shine a bright light into every dark corner of his real estate dealings.” In office, James delivered. She filed a civil fraud lawsuit against Trump, his children and his company, accusing them of inflating the value of their properties to lenders and insurance companies in order to obtain more favorable terms. The judge who heard the case, Arthur Engoron, sided with James. “The frauds found here jump off the page and shock the conscience,” he wrote in his decision, imposing a fine that increased with interest to more than half a billion dollars. (In August, a divided appeals court ruled that the sentence was excessive, but left the fraud conviction on hold until it could be reviewed by a higher court.)
Most importantly, even if James abuses her office to go after Trump, the acceptable response is not to repeat that abuse. Trump may describe himself as a dissenter, but retaliation has no place in the Doctrine of Federal Prosecution, the bible that governs the way federal prosecutors should conduct themselves. So the question raised by the indictment against James is: Would any other federal prosecutor have brought this case against any other defendant? The indictment, like Comey’s, is noticeably lacking in detail — but the answer appears to be a resounding no.
Given that Trump has publicly called for James’ prosecution, her indictment was not unexpected. But the alleged precise fraud was a surprise. In April, Bill Bolt, head of the Federal Housing Finance Agency, sent the Justice Department a “criminal referral” indicating James had purchased a home in Norfolk, Virginia, in 2023. Bolt charged that James said in one document that the property would be her “principal residence,” even though it was actually her niece’s — a fact James has mentioned elsewhere. Instead, the indictment focused on James purchasing another home in Norfolk in 2020, for $137,000. During the purchase of this other property, James signed a “second home tenant” contract that, according to the indictment, required her to “occupy and use the property as her secondary residence.” The rider itself, containing standard language from Fannie Mae, stipulated that James “will keep the property available primarily as a residence for the borrower’s personal use and enjoyment for at least one year.”
The indictment alleges that James did not use the property as her second home; Instead, she confirms that she rented the house to a family of three, although she does not provide details. It also states that James’ application for homeowner’s insurance described the property as “owner occupied,” even though her federal tax forms treated it as a “rental property.” By taking out the mortgage on a second home instead of investing, according to the indictment, James was able to borrow at a lower rate (3 percent versus 3.815 percent) and obtain greater seller credit. The indictment alleges that this “scheme and subterfuge to defraud” the lenders “by false and fraudulent representations, representations, and promises” resulted in approximately nineteen thousand dollars in “ill-gotten gains” over the life of the loan.
Does all of this rise to the level of the crime that federal prosecutors typically pursue? Do these actions constitute “massive violations of the public trust,” as Trump’s newly appointed U.S. Attorney Lindsey Halligan, an insurance lawyer with no prior prosecutorial experience, has claimed? Federal prosecutions for mortgage fraud are exceptionally rare. In 2024, only thirty-eight people were sentenced for federal mortgage fraud, four more than the previous year, according to statistics compiled by the U.S. Sentencing Commission. The amount alleged in James’ case is so trivial that it would not normally come to the attention of federal prosecutors. The fraud supposedly committed by James is rarely prosecuted as a stand-alone crime. “I don’t know of a single case where a lawsuit has been brought solely on the basis of occupancy fraud, let alone the rental of a second home,” Adam Levitin, a law professor at Georgetown University who specializes in consumer finance law and mortgage contracts, told me. For example, former Trump campaign chairman Paul Manafort was charged with occupancy fraud, after he claimed his daughter was living in a SoHo apartment in order to obtain a larger mortgage, but that was part of a sprawling twenty-five-count indictment. In addition, like Molly Roberts male on LawfareIt is unclear whether James violated the second house restrictions; Fannie Mae rewrote the rider language in 2019 to clarify that homeowners can actually rent out their property, even within the first year of ownership. James’ New York State financial disclosure form only accounts for income reported from the property — between one thousand and five thousand dollars — in one year, 2020. According to a source familiar with James’ finances, James’ niece occupied the house, did not pay rent and lived there for years.
Even if plaintiffs could prove that James violated the terms of the loan, they would also face the hurdle of proving that any such deception was intentional. “An occupancy fraud charge like the one against James is very difficult to prove on its own, because it requires proving that the borrower never intended to fulfill the promise of occupancy,” Levitin noted. It’s no wonder Halligan’s predecessor refused to press charges against James, and prosecutors did as well. “The bottom line: This is a very weak case and frankly looks like prosecutorial misconduct,” Levitin said. “It is a case that would never have been brought if there had not been a political vendetta against James.”
This case does not reflect “one level of justice for all Americans.” Prosecutors, who have limited resources, are supposed to exercise discretion, not exact retaliation. The Principles of Federal Prosecution warn that “the decision to prosecute represents a political judgment that the fundamental interests of society require the application of federal criminal law to a particular set of circumstances.” Impeaching James serves only one primary interest: Trump’s insatiable thirst for revenge. ♦