'Intent to defraud': Legal experts detail uphill battle Trump DOJ faces in NY AG indictment

10 October

New York State Attorney General Letitia James on July 27, 2022 (Lev Radin/Shutterstock.com)

On Thursday afternoon, October 9, the news broke that New York State Attorney General Letitia James had been indicted for bank fraud by a grand jury in the U.S. Department of Justice's (DOJ) Eastern District of Virginia. The indictment came only one day after former FBI Director James Comey pleaded "not guilty" to two charges at a federal courthouse in Alexandria, Virginia: lying to Congress and obstruction of Congress.

The prosecutor in both cases is Lindsey Halligan, a Donald Trump loyalist who previously served as one of his personal attorneys. Trump appointed Halligan interim U.S. attorney for the Eastern District of Virginia after former DOJ prosecutor Erik Siebert was fired for not bringing charges against Comey or James — both of whom are major Trump foes.

In an article published on October 10, Law & Crime reporter Matt Naham examines the charge that James is facing and gathers the insights of legal experts.

"As with Comey," Naham explains, "the freshly and controversially appointed Halligan, a former Trump personal lawyer with no prosecutorial experience, was the lone prosecutor to sign James' indictment, after reported internal dissent in the U.S. Attorney's Office for the Eastern District of Virginia (EDVA) over the viability of the case…. Should the prosecution survive James' inevitable motions to dismiss, which will almost certainly include claims of selective or vindictive prosecution, and possibly a challenge of Halligan's appointment, Halligan will have to prove that James 'knowingly made a false statement to a bank,' former federal prosecutor Neama Rahmani told Law & Crime."

Naham continues, "'That statement must have been material and with the intent to defraud,' Rahmani said, expressing his view that there is 'plenty of evidence that James lied about the Virginia home being her secondary residence, so her defense team will have to argue that it wasn't intentional or material.' According to the bank fraud and false statements indictment, James purchased a home, representing on bank documents that it would be a secondary residence. She allegedly did so to obtain 'more favorable mortgage terms' on a 'Fannie Mae-backed loan' — at 3 percent, instead of 3.815 percent. Rather than using the property as a personal secondary residence, James allegedly treated it as a 'rental investment,' racking up close to $19,000 in 'ill-gotten gains.'"

Rahmani noted that in federal cases, arguments of "selective" or "vindictive prosecution" rarely succeed in getting a case thrown out.

But on X, formerly Twitter, Preet Bharara, a former federal prosecutor for the Southern District of New York, said of the James indictment, "They didn't say could not be indicted; they said should not be indicted and could not be convicted. See you back here in a few months."

Former Washington Post reporter Molly Roberts, in an article for Lawfare, argued, "But let's assume for a moment that prosecutors have James dead to rights on one or more of these charges. Even then, this is not the kind of mortgage fraud case federal prosecutors normally bring. U.S. attorneys' offices typically prosecute mortgage fraud cases to nab big-time swindlers attempting to trick banks into six- to eight-figure losses. If Letitia James had committed mortgage fraud, her efforts would have yielded her only thousands of dollars — tens of thousands at most. The only world in which James' activities would merit this level of attention is the political one. And that is precisely the point."

Read Matt Naham's full article for Law & Crime at this link and Molly Roberts' Lawfare article here.

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