A federal grand jury has declined to indict New York Attorney General Letitia James, according to a source familiar with the proceedings.
The decision comes less than two weeks after a judge ruled that a previous indictment related to the same mortgage fraud allegations was unlawful.
The move by the Justice Department to bring the case back before a grand jury was widely viewed as an aggressive attempt to prosecute James, a prominent political adversary of President Donald Trump who successfully secured a civil fraud ruling against him in New York.
James was originally charged in October with one count of bank fraud and one count of making false statements to a financial institution.
The charges stemmed from a mortgage she received for a property in Norfolk, Virginia, in 2020. Prosecutors alleged that James received a lower interest rate by classifying the home as a second residence when it was ultimately rented out. The reduced rate amounted to a savings of roughly $18,933 over the life of the loan.
James’s niece currently lives in the home and reportedly testified that she did not pay rent.
From the start, James has denied wrongdoing, and her team argued that the prosecution was invalid because the U.S. attorney overseeing the case, Lindsey Halligan, was unlawfully appointed. Halligan, a Trump ally and former White House aide, personally presented the original case to the grand jury.
A federal judge agreed that Halligan’s appointment was improper. U.S. attorneys are required to be confirmed by the Senate or may serve in an acting capacity for up to 120 days. After that period, federal judges determine who assumes the role.
Halligan took the post after her predecessor, Erik Siebert, stepped down, but Siebert’s appointment had already extended beyond the allowed time. The judge ruled that Trump lacked the authority to appoint a successor at that point, making Halligan’s tenure invalid.
In addition to procedural concerns, legal experts have questioned the merits of the case itself. The financial benefit at issue, less than $20,000 over a mortgage lifespan, was so small that former prosecutors described the charges as unusually thin.
As I've said from the start, these charges are baseless. It's time for the weaponization of our justice system to stop.
— NY AG James (@NewYorkStateAG) December 5, 2025
I'm grateful to the members of the grand jury and humbled by the support I've received across the nation. I will keep doing my job standing up for New Yorkers.
Documents linked to the case reportedly show that James made clear to her mortgage broker she did not intend to use the property as a primary residence, which further complicates the accusation. Several career prosecutors who initially declined to recommend charges were later dismissed from their roles.
Following Thursday’s outcome, James’s attorney Abbe Lowell issued a response:
“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.”
James also posted a statement on X (formerly Twitter), writing:
“As I’ve said from the start, these charges are baseless. It’s time for the weaponization of our justice system to stop. I’m grateful to the members of the grand jury and humbled by the support I’ve received across the nation. I will keep doing my job standing up for New Yorkers.”
