Federal prosecutors did not secure a new indictment Thursday against New York Attorney General Letitia James after a grand jury in Virginia refused to return charges, according to people familiar with the matter.
The effort followed a judge’s earlier decision to dismiss a prior mortgage-fraud prosecution that targeted James and former FBI Director James Comey. That case was thrown out after a judge found the U.S. attorney who presented the matters had been illegally appointed.
After the dismissal, prosecutors went back to the grand jury in the Eastern District of Virginia, but jurors declined to bring charges. Officials said prosecutors intend to seek an indictment again, one person familiar with the matter told reporters on the condition of anonymity.
James had been accused of bank fraud and making false statements to a financial institution related to her 2020 purchase of a Norfolk, Virginia, home. Prosecutors allege she signed a routine “second home rider” promising to use the property primarily for personal use for at least a year unless the lender agreed otherwise, yet rented it out, enabling loan terms reserved for noninvestment homes.
The case had been presented to a grand jury in October by Lindsey Halligan, a former White House aide and Trump lawyer who was installed as U.S. attorney for the Eastern District of Virginia amid pressure from President Trump to prosecute Comey and James.
James has denied wrongdoing and characterized the prosecutions as political retaliation. In a statement Thursday she said, “It is time for this unchecked weaponization of our justice system to stop.” Her attorney, Abbe Lowell, added, “This should be the end of this case. If they continue, undeterred by a court ruling and a grand jury’s rejection of the charges, it will be a shocking assault on the rule of law and a devastating blow to the integrity of our justice system.”
Grand jurors’ refusal to indict stands out amid a series of recent setbacks for the Justice Department under President Trump’s second administration. Prosecutors traditionally note the difficulty of getting a grand jury to decline charges — the old joke being a grand jury could “indict a ham sandwich” — yet several high-profile matters have encountered resistance.
Even if charges are refiled, prosecutors could face challenges at trial. James’ defense says the effort amounts to vindictive prosecution designed to punish a critic of the president who previously investigated and sued Trump over alleged misrepresentations to banks; that litigation produced a large judgment that was later overturned on appeal, with further appeals still pending. Defense lawyers also argued that the government’s conduct surrounding the indictment was so improper that it warranted dismissal, though the judge had not ruled on those claims before dismissing the case on appointment grounds.
U.S. District Judge Cameron McGowan Currie criticized how Halligan was installed. Halligan took over after interim U.S. Attorney Erik Siebert resigned in September following reported pressure from the administration to bring charges against Comey and James. The night after Siebert’s resignation, Trump said he would nominate Halligan as interim U.S. attorney and urged then-Attorney General Pam Bondi to act against his political opponents on Truth Social: “We can’t delay any longer, it’s killing our reputation and credibility” and “JUSTICE MUST BE SERVED, NOW!!!”
Comey was indicted three days after Halligan was sworn in by Bondi; James was charged two weeks later. The Justice Department defended Halligan’s appointment but disclosed Bondi had given Halligan a separate title of “Special Attorney,” a retroactive designation the judge said could not save the prosecutions.
Richer reported from Washington.