Trump-Appointed Prosecutor Pushes Case Amid Accusations of Political Retaliation Over Prior Trump Fraud Suit

October 9, 2025 - Alexandria, Virginia (NBC News)

ALEXANDRIA, Va. — A federal grand jury in Virginia indicted New York Attorney General Letitia James on Thursday on one count of bank fraud, escalating a probe into allegations that she falsified records to secure favorable mortgage loans. The charges stem from claims that James misrepresented a Norfolk, Virginia, property as her principal residence in 2023 to obtain "sweetheart" home loans, despite her role as New York's top prosecutor requiring her presence in New York City.

The indictment was presented by Lindsey Halligan, a Trump personal attorney recently appointed as acting U.S. attorney for the Eastern District of Virginia, who lacks prior prosecutorial experience but has been tasked with accelerating investigations into the president's political adversaries. Halligan personally argued the case before the grand jury, securing the indictment despite earlier concerns from federal agents and prosecutors that evidence might not support a conviction.

The probe originated from a referral in April by Federal Housing Finance Agency Director Bill Pulte, a Trump appointee, who accused James of crimes including wire fraud, mail fraud, bank fraud, and making false statements to a financial institution. Pulte alleged James "falsified records" for loans on the Virginia house, located hundreds of miles from her New York office. This marks the second high-profile indictment of a Trump critic under the new administration; former FBI Director James Comey was indicted earlier this week on charges of lying to Congress and obstruction, also handled by Halligan.

James, a Democrat who spearheaded a landmark civil fraud lawsuit against President Donald Trump and his family business—resulting in a $464 million judgment before his reelection—has faced repeated calls from Trump for criminal prosecution. Trump publicly urged his Justice Department to pursue charges against her, viewing the civil case as politically motivated. Critics, including Democratic lawmakers and legal experts, decried the indictment as blatant retaliation, pointing to the Justice Manual's guidance that prosecutors should only seek charges if evidence supports a sustainable conviction.

As of Thursday evening, James' office had not issued a formal statement, but sources close to her described the move as "a desperate attempt at revenge" by the Trump administration. Trump, speaking at a rally in Pennsylvania, celebrated the development without directly commenting, saying only, "Justice is finally being served against those who weaponized the law against me." Attorney General Pam Bondi, who appointed a special prosecutor for the James probe in August, defended the action as "upholding the rule of law."

The lower bar for indictment compared to conviction means James could still prevail at trial, where the case would unfold in federal court. Legal observers noted the timing—mere months after Trump's inauguration—raises questions about the independence of the Justice Department under his leadership. This is a developing story, with arraignment details pending.