Grand Jury Blocks DOJ Push to Reopen Case Against NY AG Letitia James

A federal grand jury in Norfolk, Virginia has rejected the U.S. Department of Justice’s attempt to bring back mortgage-fraud charges against New York Attorney General Letitia James, marking a decisive setback for federal prosecutors and sharply limiting the chances of the case being revived in the near future.

The DOJ had sought a new indictment only days after the original case collapsed on procedural grounds. In October 2025, James was charged with bank fraud and providing false information on mortgage documents related to a 2020 property purchase in Norfolk. Investigators alleged she misclassified the home as a “second residence” to secure more favorable loan terms while simultaneously renting out the property. The allegations sparked intense political debate and quickly became one of the most closely watched legal battles in the country.

However, the first indictment unraveled in late November when a federal judge ruled that the prosecutor who filed the charges — Lindsey Halligan, known for her past legal work for Donald Trump — had been improperly appointed. Because the appointment violated federal requirements, the judge voided every legal action connected to her role, including the indictment itself.

Rather than abandon the investigation, DOJ officials swiftly moved to present the evidence to a newly empaneled grand jury, hoping to restart the case cleanly and avoid the procedural flaws that derailed their first attempt. But on Thursday, the grand jury declined to issue any charges, effectively sending a message that the evidence did not meet the standard for probable cause.

The outcome stunned many legal observers. Grand juries rarely reject federal prosecutors, who historically obtain indictments in the overwhelming majority of cases they bring forward. The refusal suggests that jurors were unconvinced not only by the facts presented but potentially by the motivations behind the prosecution — a case critics have repeatedly labeled as politically charged.

Letitia James responded swiftly, stating she was “deeply relieved” and reaffirming her position that the allegations were “meritless from the beginning.” Her legal team criticized the renewed effort as an “unjustified and reckless pursuit” driven by partisan interests rather than evidence.

For the DOJ, the decision deals a considerable blow. With two failed attempts in under a month, prosecutors now face mounting pressure over their handling of the case — including internal disputes and reports that several career officials declined involvement over concerns about the strength of the evidence.

Political implications are also significant. James has long been a figure of national prominence, particularly after leading civil litigation against Donald Trump and major New York financial institutions. The failed prosecution attempt has intensified debate over the boundaries between law enforcement, political rivalry, and public accountability.

For now, the grand jury’s decision appears to close the door on further attempts to charge James. While DOJ officials have not formally announced their next steps, legal experts say another push would be “highly unlikely” given the resounding rejection.

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