A federal grand jury in the United States has declined to authorise a new indictment against New York Attorney General Letitia James, dealing a fresh blow to a controversial mortgage fraud prosecution originally encouraged by former President Donald Trump.
Legal Proceedings Dismissed and Revisited
This latest development occurred on Thursday, 4 December 2025, after prosecutors returned to the grand jury in Virginia. Their move followed a judge's decision to dismiss the original prosecution of James and another long-time Trump adversary, former FBI Director James Comey. The judge, U.S. District Judge Cameron McGowan Currie, halted the cases last month, ruling that the U.S. attorney who presented them, Lindsey Halligan, had been illegally appointed.
The Justice Department, which defended Halligan's appointment, could theoretically attempt to go back to the grand jury again. A person familiar with the matter, speaking anonymously, confirmed the failure to secure the new indictment.
Origins of the Case and Allegations
Letitia James was initially charged in October 2025 by the U.S. attorney installed by the Trump administration. This prosecutor replaced the previous office holder, Erik Siebert, a veteran who resigned in September amid pressure from the administration to file charges against both Comey and James. Siebert stepped aside after Trump told reporters he wanted him "out."
The allegations centred on James's purchase of a modest house in Norfolk, Virginia, where she has family. Prosecutors claimed that during the sale, she signed a standard "second home rider," agreeing to keep the property for her personal use for at least one year. Instead, they alleged, she rented it out to a family of three, thereby securing favourable loan terms not available for investment properties. James has consistently denied any wrongdoing.
A Case Mired in Accusations of Political Vengeance
James and her legal team have framed the case as a politically motivated attack. They argued it was a vindictive prosecution brought to punish a prominent Trump critic. James spent years investigating and suing the former Republican president, notably winning a massive judgment in a lawsuit alleging he defrauded banks by overstating his real estate assets. That fine was later overturned by a higher court, with both sides currently appealing.
The defence also alleged "outrageous government conduct" preceding her indictment. Judge Currie had not ruled on these arguments before dismissing the case over the appointment issue.
The appointment mechanism for Lindsey Halligan was highly contentious. Halligan, a former White House aide with no prior prosecutorial experience, was named by Trump as interim U.S. attorney after he publicly implored then-Attorney General Pam Bondi to act against his political opponents. In a Truth Social post, Trump wrote, "We can’t delay any longer, it’s killing our reputation and credibility" and "JUSTICE MUST BE SERVED, NOW!!!"
Comey was indicted three days after Halligan was sworn in, and James was charged two weeks later. In an attempt to protect the indictments, Bondi had given Halligan a separate "Special Attorney" designation, but Judge Currie ruled this retroactive move could not save the cases.
Although the defence sought a dismissal with prejudice, which would bar a future revival of the charges, Judge Currie dismissed them without prejudice. This leaves the door open, albeit with significant obstacles, for the Justice Department to try again, a prospect now complicated by the grand jury's recent rejection.
