Executive Summary
- A federal grand jury declined to re-indict NY AG Letitia James on mortgage fraud charges.
- The initial case was dismissed after a judge ruled the prosecutor was unlawfully appointed.
- Defense attorneys allege the prosecution is politically motivated by President Trump.
- The Department of Justice retains the theoretical option to seek an indictment a third time.
A federal grand jury has declined to return a new indictment against New York Attorney General Letitia James on mortgage fraud charges, just ten days after a federal judge dismissed the initial case due to procedural defects regarding the prosecutor’s appointment. According to sources familiar with the matter, the Department of Justice presented the case to the grand jury on Thursday seeking to reinstate the charges, but the jurors declined to indict.
The legal setback for federal prosecutors follows a ruling late last month by U.S. District Judge Cameron McGowan Currie. Judge Currie dismissed the original indictments against James and former FBI Director James Comey after determining that Lindsey Halligan, the interim U.S. Attorney overseeing the cases, was unlawfully appointed. The court found that the 120-day statutory window for an interim appointment under the Federal Vacancies Reform Act had expired before Halligan assumed the role, rendering her actions, including signing the indictments, invalid exercises of executive power.
While Judge Currie dismissed the cases “without prejudice,” a legal standard that allows the government to refile charges, the grand jury’s refusal to issue a true bill complicates the prosecution’s efforts. A source familiar with the situation noted that while the Justice Department maintains the ability to seek an indictment a third time, the latest development suggests significant challenges for the government. A Justice Department spokesperson declined to comment on the grand jury proceedings, which are conducted in secret.
Defense attorneys for James have vigorously contested the charges, arguing they are the result of selective and vindictive prosecution. James’s legal team has pointed to social media posts by President Donald Trump calling for the prosecution of his political opponents as evidence of improper motive. In court filings, they accused the government of transforming the Justice Department into an instrument of political retribution. James had previously pleaded not guilty to one count of making false statements to a financial institution and one count of bank fraud.
The timeline of the prosecution has been scrutinized due to the irregularity of Halligan’s appointment. Judge Currie’s ruling highlighted that allowing the appointment to stand would enable officials to evade the Senate confirmation process by stacking successive temporary appointments. The court noted that the authority to appoint an interim U.S. Attorney in the Eastern District of Virginia expired in May 2025, months before Halligan attempted to take office in September.
Legal Ramifications
The grand jury’s decision not to re-indict immediately following a procedural dismissal is a significant procedural hurdle for the Department of Justice. While the initial dismissal was based on the technical legality of the prosecutor’s appointment, a grand jury’s refusal to indict addresses the merits of the evidence presented. This outcome may strengthen the defense’s position should the government attempt to bring the case before a third grand jury. The situation underscores the rigid procedural standards required in federal prosecutions, particularly those involving high-profile public officials. It is important to note that all individuals are presumed innocent until proven guilty in a court of law.
