Federal authorities have opened a criminal investigation into allegations of mortgage fraud by New York’s attorney general, Letitia James, according to a new report.

The FBI and the U.S. Attorney’s Office in Albany are leading the inquiry, according to the Albany Times Union.

The investigation follows a federal criminal referral issued earlier this month by the Federal Housing Finance Agency director, William Pulte, to the Department of Justice. The referral alleges that Ms. James used “falsified records” to secure lower mortgage rates on loans for two properties she owns — a house bought in Norfolk, Virginia, in 2023 and a Brooklyn brownstone she has owned since 2001.

Mr. Pulte alleged that Ms. James “falsified bank documents and property records to acquire government-backed assistance and loans with more favorable terms.” 

According to the referral, Ms. James also claimed the Virginia property would serve as her “principal residence” despite being New York’s attorney general at the time. Additionally, the allegations suggest she misrepresented the number of residential units in her Brooklyn property.

Mr. Pulte’s referral notes that primary residence mortgages often come with significantly lower interest rates and better terms than loans for secondary homes. Specifically, documents tied to the Norfolk home stated that Ms. James’s niece would live there, but conflicting records also listed the property as Ms. James’s primary residence. 

Her defense attorney, Abbe Lowell, said the investigation stems from misinformation. He noted that Ms. James wrote in a document: “This property WILL NOT be my primary residence. It will be Shamice’s primary residence.”

Mr. Lowell — whose clients have included Hunter Biden as well as Jared and Ivanka Trump — claims the charges amount to a “revenge tour” built from “cherry-picked” evidence. Mr. Lowell calls Mr. Pulte’s criminal referral “three pages of stale, threadbare allegations with no reason to proceed.”

Mr. Lowell also claims that the investigation into Ms. James is politically motivated, possibly initiated as retribution for legal actions brought by Ms. James’s office against President Trump. “The stunning hypocrisy of President Trump’s complaint that the Justice Department had been ‘politicized’ … is laid bare as he and others in his administration are now asking you to undertake the very same practice,” Mr. Lowell wrote. 

While Attorney General Bondi has not yet indicated publicly whether she intends to move on Mr. Pulte’s criminal referral, Ms. James’s record of litigating against Mr. Trump is already on her radar. The Weaponization Working Group convened by Ms. Bondi vows to probe “Federal cooperation with the weaponization by … New York Attorney General Letitia James, their respective staffs, and other New York officials to target President Trump, his family, and his businesses.”