New York Attorney General Letitia James, who has been indicted, reportedly listed her Virginia home as an “investment” property in multiple financial disclosure forms, even though she allegedly provided false information to a bank to secure a favorable loan that barred her from renting out the home.
However, the three-bedroom home in Norfolk, Virginia, that James bought in August 2020 — named in Thursday’s federal grand jury indictment — was listed as an “investment” in the “real estate” section of her financial disclosures to the New York State Commission on Ethics and Lobbying in Government for 2020, 2021, 2022, and 2023, with a reported value of not less than “$100,000 to $150,000.”
Open Fraud
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In her 2024 disclosure, however, James changed the designation of the Norfolk property from an “investment” to “real property.” James also hiked the reported value of the single-family home, listing it as between “$150,000 and under $250,000.”
James filed her 2024 disclosure in May, just a month after Federal Housing Finance Agency (FHFA) Director William Pulte sent a criminal referral to the Justice Department, alleging that she had “falsified records” to secure home loans for a different property in Norfolk, Virginia.
It’s not clear why James changed the designation from “investment” to “real property” in her 2024 filing.
Between 2021 and 2024, she did not report earning any income from the Norfolk home at the center of the indictment. In her 2020 disclosures, James noted that an “investment real property” in Norfolk had generated between $1,000 and $5,000 in income, though it’s unclear if this is the same property mentioned in the indictment.
Federal prosecutors claim that in 2020, James provided false information about how she planned to use the property when she secured a $109,600 mortgage from OVM Financial, backed by Fannie Mae, to buy the $137,000 home.
False Claims
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James agreed to a “Second Home Rider” when she took out the loan, according to the indictment, which required her to “occupy and use the property as her secondary residence, and prohibited its use as a timesharing or other shared ownership arrangement or agreement that requires her either to rent the property or give any other person any control over the occupancy or use of the property.”
“Despite these representations,” prosecutors wrote, the Norfolk property “was not occupied or used by James as a secondary residence and was instead used as a rental investment property.”
According to the Department of Justice, James’ “misrepresentation” helped her secure a mortgage rate she wouldn’t have qualified for if she had told the lender she intended to rent out the home. Prosecutors say her “ill-gotten gains” from the lower rate totaled roughly $18,933 over the life of the loan.
She also allegedly misrepresented the home’s use on a homeowners’ insurance application, listing it as “owner-occupied.” Yet on her federal tax returns, James treated the Norfolk property as “rental real estate,” reporting thousands of dollars in rental income and claiming deductions for related expenses, according to the indictment.
James has been charged with bank fraud and making false claims to a financial institution. If convicted on both counts, she could face up to 60 years in prison and fines reaching $2 million. She is scheduled to make her first appearance in federal court in Virginia on October 24.