A federal grand jury in Alexandria, Virginia, declined Thursday to indict New York Attorney General Letitia James on mortgage fraud charges, marking the second time in seven days that Department of Justice prosecutors have failed to secure charges against James.
Federal prosecutors presented their case to the Alexandria grand jury on Thursday, seeking to revive allegations that James committed bank fraud and made false statements to a financial institution regarding a mortgage application for a property in Norfolk, Virginia. According to news reports, the grand jury issued a “no true bill,” declining to indict on the charges that had been dismissed by a federal judge last month.
The twin rejections follow a pattern of escalating legal challenges for the Justice Department. On December 4, a Norfolk grand jury refused to re-indict James after prosecutors attempted to salvage the case following its earlier dismissal.
Thursday’s outcome in Alexandria suggests prosecutors face fundamental evidentiary hurdles in convincing impartial grand jurors of the case’s merits.
The case against James originated from mortgage applications she submitted for properties in Norfolk. Prosecutors alleged that James misrepresented her intention to use a home purchased in 2020 as a secondary residence rather than an investment property, allegedly securing more favorable loan terms worth approximately $18,933 over the life of the loan.
James’s defense has maintained that family members resided there without a formal rental agreement, justifying the “secondary residence” classification.
James was initially indicted on October 9, 2025, in a case brought by Lindsey Halligan, a former personal attorney for Trump who had been appointed as interim U.S. Attorney for the Eastern District of Virginia. The appointment came after career prosecutors in the Eastern District concluded they lacked sufficient evidence to pursue criminal charges and were subsequently removed from their positions.
U.S. District Judge Cameron Currie dismissed the original indictment on November 24, ruling that Halligan’s appointment violated legal requirements. The dismissal was “without prejudice,” allowing prosecutors to seek a new indictment with a properly appointed prosecutor.
James and her legal team have consistently characterized the prosecution as a politically motivated attack stemming from her civil litigation against Trump. As New York’s attorney general, James successfully sued Trump, his adult sons, and the Trump Organization for fraudulently inflating property values, initially securing a $355 million judgment.
President Trump has made no secret of his desire to see James prosecuted. In a September 20 post on Truth Social directed at Attorney General Pam Bondi, Trump wrote: “JUSTICE MUST BE SERVED, NOW!!!” and specifically named James among his political opponents he wanted targeted.
While prosecutors could theoretically attempt to present the case to a third grand jury, legal analysts suggest such a move would face heightened scrutiny and potentially strengthen arguments that the department is engaged in a politically driven persecution rather than good-faith law enforcement.
