ALEXANDRIA, VA (October 10, 2025) — Lindsey Halligan, U.S. Attorney for the Eastern District of Virginia, announced Thursday that a federal grand jury returned an indictment charging New York State Attorney General Letitia James with bank fraud under 18 U.S.C. Section 1344 and false statements to a financial institution under 18 U.S.C. Section 1014.
“No one is above the law. The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public’s trust,” said U.S. Attorney Halligan. “The facts and the law in this case are clear, and we will continue following them to ensure that justice is served.”
If convicted, Letitia James faces penalties including up to 30 years in prison per count, up to a $1 million fine on each count, and forfeiture. Actual sentences for federal crimes are typically less than the maximum penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
James decried her federal indictment on bank fraud charges as a politically motivated attack orchestrated by President Donald Trump, vowing to fight the “baseless” accusations while defending her office’s civil fraud case against the Trump Organization.
James called the charges “nothing more than a continuation of the president’s desperate weaponization of our justice system,” alleging Trump forced federal agencies to pursue them in retaliation for her office’s litigation against the Trump Organization.
“This is nothing more than a continuation of the president’s desperate weaponization of our justice system. He is forcing federal law enforcement agencies to do his bidding, all because I did my job as the New York State Attorney General,” James said.
“These charges are baseless, and the president’s own public statements make clear that his only goal is political retribution at any cost. The president’s actions are a grave violation of our Constitutional order and have drawn sharp criticism from members of both parties,” she continued.
James accused Trump of firing a U.S. Attorney who refused to bring charges against her and replacing them with a loyalist, calling it “antithetical to the bedrock principles of our country.” She urged leaders from both parties to speak out against the “blatant perversion of our system of justice.”
Defending her office’s work, James noted: “I stand strongly behind my office’s litigation against the Trump Organization. We conducted a two-year investigation based on the facts and evidence – not politics. Judges have upheld the trial court’s finding that Donald Trump, his company, and his two sons are liable for fraud.”
Concluding on a personal note, James said: “I am a proud woman of faith, and I know that faith and fear cannot share the same space. And so today I am not fearful, I am fearless, and as my faith teaches me, no weapon formed against me shall prosper. We will fight these baseless charges aggressively, and my office will continue to fiercely protect New Yorkers and their rights. And I will continue to do my job.”
The case document, a five-page indictment, includes a redacted copy filed pursuant to the E-Government Act, with the original filed under seal.
The indictment alleges she misrepresented a Norfolk, Virginia, property as her secondary residence to secure favorable mortgage terms while using it as a rental investment.
The indictment, returned during the October 2025 term in open court in Alexandria and filed October 9, 2025, in U.S. District Court for the Eastern District of Virginia under Criminal No. 2:25cr122, accuses James, a Brooklyn resident, of violating 18 U.S.C. § 1344 for bank fraud and 18 U.S.C. § 1014 for false statements, along with criminal forfeiture provisions under 18 U.S.C. §§ 981(a)(1)(C) and 982(a).
At all times relevant to the indictment, James was the borrower on a Fannie Mae-backed mortgage loan for the property at 3121 Peronne Avenue, Norfolk, Virginia.
OVM Financial, also known as Old Virginia Mortgage/AnniMac, was a mortgage lending business located in Virginia Beach, Virginia, engaged in originating and underwriting residential mortgage loans, including those backed by the Federal National Mortgage Association (Fannie Mae). OVM Financial qualified as a “financial institution” within the meaning of 18 U.S.C. § 2010.
Fannie Mae was a federally chartered corporation that purchased and guaranteed mortgages, operating as a government-sponsored enterprise under the oversight of the Federal Housing Finance Agency (FHFA).
First Savings Bank was a state-chartered, FDIC-insured financial institution (Certificate #2961), headquartered in Jeffersonville, Indiana, which acquired mortgage loans through assignment or acquisition. First Savings Bank qualified as a “financial institution” within the meaning of 18 U.S.C. § 201.
On or about August 17, 2020, James, as sole borrower, purchased the three-bedroom, one-bathroom property located at 3121 Peronne Avenue, Norfolk, Virginia 23509 (the “Peronne Property”), for approximately $137,000, financed with a mortgage loan of approximately $109,600 (Loan #4403025798) backed by Fannie Mae.
The loan was originated by OVM Financial under a signed Second Home Rider, which required James, as the sole borrower, to occupy and use the property as her secondary residence and prohibited its use as a timesharing or other shared ownership arrangement or agreement that requires her either to rent the property or give any other person any control over the occupancy or use of the property.
Despite these representations, the Peronne Property was not occupied or used by James as a secondary residence and was instead used as a rental investment property, renting the property to a family of three.
This misrepresentation allowed James to obtain favorable loan terms not available for investment properties, including a note rate of 3.000% (avoiding a 0.815% higher comparable investment property rate of 3.815%), resulting in approximately $1,787 in rate savings over the life of the loan, a seller credit of approximately $3,288 (exceeding the seller credit for investment properties by approximately $1,096), for total ill-gotten gains of approximately $18,933 over the life of the loan.
James’ Universal Property application for homeowners’ insurance indicated “owner-occupied non-seasonal use,” further misrepresenting the intended use of the property.
James filed Schedule E tax forms, under penalty of perjury, treating the Peronne Property as rental real estate, reporting fair rental days, zero personal use days, thousands of dollars in rents received, and claiming deductions for expenses relating to the property, further contradicting the second home classification.
The loan was acquired by or assigned to First Savings Bank by March 2021, exposing it to risks associated with the misrepresented loan.
The acts described occurred within the Eastern District of Virginia.
In Count One (Bank Fraud – 18 U.S.C. § 1344), the indictment alleges that from on or about August 7, 2020, through at least January 2024, in the Eastern District of Virginia and elsewhere, James did knowingly execute and attempt to execute a scheme and artifice to defraud OVM Financial and First Savings Bank, financial institutions, and to obtain moneys, funds, and credits owned by and under the custody and control of OVM Financial and First Savings Bank, by means of false and fraudulent pretenses, representations, and promises.
The scheme involved falsely representing the Peronne Property as a secondary residence to obtain favorable mortgage terms, while using it as an investment property with no intended or actual personal occupancy or use by her (in violation of Title 18, United States Code, Section 1344).
In Count Two (False Statements to a Financial Institution – 18 U.S.C. § 1014), the indictment alleges that from on or about July 28, 2020, through at least August 31, 2020, in the Eastern District of Virginia and elsewhere, James did knowingly make and cause to be made false statements and reports for the purpose of influencing the action of OVM Financial, a Fannie Mae-backed lender, upon an application for a loan, in that James represented and affirmed in uniform residential loan applications and related documents that the Peronne Property would be used as a secondary residence, when in truth and fact, as James then knew, the property was intended and used as an investment property with no intended or actual personal occupancy or use by her (in violation of Title 18, United States Code, Section 1014).
Pursuant to Federal Rule of Criminal Procedure 32.2(a) and Title 18, U.S.C. §§ 982(a)(2)(A), upon conviction of the offenses in Counts One and Two, James shall forfeit to the United States any property constituting, or derived from, proceeds obtained, directly or indirectly, as a result of such violations, including but not limited to a money judgment in the amount of $18,933.
If any of the property described above, as a result of any act or omission of the defendant: (a) cannot be located upon the exercise of due diligence; (b) has been transferred or sold to, or deposited with, a third party; (c) has been placed beyond the jurisdiction of the court; (d) has been substantially diminished in value; or (e) has been commingled with other property which cannot be divided without difficulty, the United States shall be entitled to forfeiture of substitute property pursuant to Title 21, U.S.C. § 853(p), as incorporated by Title 18, U.S.C. § 982(b)(1).
The indictment was returned as a true bill by the foreperson and signed by Lindsey Halligan, United States Attorney. Pursuant to the E-Government Act, the original of this page has been filed under seal; this is a redacted copy.
Upon conviction, James would forfeit any property derived from the offenses, including a $18,933 money judgment, with provisions for substitute assets if necessary.
This article was drafted with the aid of Grok, an AI tool by xAI, under the direction and editing of Robert Cox to ensure accuracy and adherence to journalistic standards.