For a second time in recent days, a federal grand jury in Virginia has refused to indict New York Attorney General Letitia James for alleged mortgage fraud, sources said.
The grand jury rejected the Department of Justice’s attempt to refile the case after a federal judge dismissed an earlier case based on the unlawful appointment of the U.S. attorney in the Eastern District of Virginia.
Federal prosecutors on Thursday failed to convince a majority of grand jurors to approve charges that James misled a bank to obtain favorable loan terms on a home mortgage, according to sources.
The charges were presented to a grand jury in the Eastern District of Virginia’s Alexandria branch after a grand jury in Norfolk, Virginia, last week rejected the charges.
A Justice Department spokesperson did not immediately respond to a request for comment from ABC News.
“This unprecedented rejection makes 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 it, 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 be a mockery of our system of justice.”
Prosecutors have alleged that James, who successfully brought a civil fraud case against now-President Donald Trump last year, falsely listed a home she purchased in 2020 as a second home instead of an investment property in order to save potentially $19,000 over the life of the loan with a more favorable mortgage rate.
Letitia James, New York’s attorney general, speaks outside federal court in Norfolk, Virginia, Oct. 24, 2025.
Eric Lee/Bloomberg via Getty Images
As ABC News previously reported, prosecutors who investigated James for possible mortgage fraud found evidence that appeared to undercut some of the allegations in the indictment of James secured in September — including the degree to which James allegedly personally profited from her purchase of the property.
James has denied all wrongdoing.
This is a developing story. Please check back for updates.
