On Thursday, December 4, 2025, a federal grand jury in Norfolk, Virginia, delivered a decisive blow to the Department of Justice’s (DOJ) efforts to prosecute New York Attorney General Letitia James on mortgage fraud charges. This outcome, reported by ABC News, MS NOW, and several other outlets, came just ten days after a federal judge dismissed an earlier case against James due to the unlawful appointment of the U.S. attorney who had brought the initial charges.
The DOJ’s renewed push to indict James stemmed from a high-profile investigation into her 2023 purchase of a home in Norfolk, Virginia. Prosecutors alleged that James misled a bank by signing a “second home rider” on her mortgage application, promising to use the property as a secondary residence for at least a year, but instead renting it out, thereby securing more favorable loan terms. According to the DOJ’s calculations, this could have saved her as much as $19,000 over the life of the loan. However, as ABC News and The Independent reported, the grand jury was not convinced, returning what’s known as a “no true bill”—in essence, a refusal to indict.
The case has been mired in controversy from the outset. The original indictment against James was secured in October 2025 by Lindsey Halligan, a former personal attorney to President Donald Trump, who was appointed as acting U.S. attorney for the Eastern District of Virginia. Halligan’s appointment itself became a lightning rod for legal and political debate. U.S. District Judge Cameron McGowan Currie ultimately ruled that Halligan’s installation was unlawful, nullifying her actions—including indictments not just against James, but also against former FBI Director James Comey, another frequent Trump critic.
Judge Currie’s decision left the door open for the DOJ to try again, dismissing the cases without prejudice. But the subsequent grand jury’s rejection of the charges against James marks what many legal analysts see as a significant setback for the department’s case. As reported by MS NOW, the DOJ may still attempt to bring charges again in the future, but the hurdles—both procedural and evidentiary—remain steep.
The political context surrounding the case has only intensified scrutiny. President Trump had publicly and repeatedly called for the prosecution of his perceived political adversaries, including James and Comey. In September, just before Halligan was appointed, Trump openly urged Attorney General Pam Bondi to act more aggressively against his foes, posting on Truth Social: “We can’t delay any longer, it’s killing our reputation and credibility. JUSTICE MUST BE SERVED, NOW!!!”
Halligan’s appointment itself was highly unusual. Typically, career prosecutors with deep experience present cases before grand juries and sign indictments. In this instance, Halligan, who had no prior prosecutorial background, was the sole DOJ official to sign the indictments against both James and Comey. According to Democracy Docket, several career prosecutors in the Eastern District of Virginia had previously concluded there was insufficient evidence to pursue charges, and some were reportedly pushed out of their roles after raising concerns.
The allegations against James focused on her signing of a “second home rider” in her mortgage documents. The DOJ claimed that, by renting out the Norfolk property to a family of three rather than using it as a residence, James had secured loan terms not available for investment properties. Yet, as ABC News noted, prosecutors investigating the case found evidence that appeared to undercut key parts of the indictment, including the extent to which James personally benefited from the arrangement.
James, for her part, has been steadfast in her defense. In a statement released after the grand jury’s decision, she said, “As I have said from the start, the charges against me are baseless. It is time for this unchecked weaponization of our justice system to stop.” She added, “I am grateful to the members of the grand jury and humbled by the support I have received from across the country. Now, I will continue to do my job standing up for the rule of law and the people of New York.”
Her legal team has argued that the prosecution was not only factually weak but also motivated by political animus. In court filings, they alleged that the DOJ’s pursuit of James was “vindictive,” a direct response to her successful civil fraud case against Trump in 2024—a case in which James won a substantial judgment, later overturned on appeal, against the former president for overstating his real estate assets. James’s lawyers also claimed “outrageous government conduct,” asserting that the DOJ violated her constitutional rights by targeting her for political reasons.
The saga has also drawn attention to the broader issue of prosecutorial independence and the politicization of the justice system. Judge Currie, in her ruling, criticized the mechanism by which Halligan was appointed, noting that Attorney General Bondi had retroactively tried to give Halligan a separate “Special Attorney” designation in an attempt to salvage the indictments. But the judge found this maneuver insufficient, emphasizing that such retroactive fixes could not legitimize actions taken by an unlawfully appointed official.
As for James Comey, it remains unclear whether prosecutors will seek to revive allegations against him for allegedly making false statements to Congress in 2020. Both Comey and James filed legal challenges arguing that they were targeted at Trump’s direct orders—a claim that could resonate with judges considering the prosecutorial process in these cases.
The DOJ’s failure to secure an indictment this week does not necessarily spell the end of the matter. As The Independent and ABC News both note, the department retains the option to return to the grand jury. However, the repeated setbacks, the questions over procedural integrity, and the public statements from James and her supporters have all contributed to a sense that the prosecution is on increasingly shaky ground.
For now, Letitia James remains in her post as New York’s attorney general, vowing to continue her work. The grand jury’s decision is a rare and public rebuke of the federal government’s efforts, highlighting the complexities—and the high stakes—when legal battles intersect so directly with partisan politics. Whether the DOJ will try again, and whether it can overcome the legal and factual obstacles it faces, remains to be seen. What is clear is that the fight over the boundaries of prosecutorial power and political influence is far from over.
