Attorney General Pam Bondi was reportedly caught off guard Thursday when Lindsey Halligan, President Trump’s newly appointed U.S. Attorney for the Eastern District of Virginia, secured a federal indictment against New York Attorney General Letitia James without prior coordination with DOJ leadership in Washington, D.C., according to multiple sources familiar with the situation.
The charges stem from a 2020 property purchase in Norfolk, Virginia. Prosecutors allege that James falsely claimed the home was a secondary residence to obtain favorable mortgage terms, then rented the property out in violation of those terms—allegedly saving nearly $19,000 in interest. She now faces two felony counts: bank fraud and making false statements to a financial institution.
If convicted, James could face up to 30 years in prison per count, fines up to $1 million each, and potential forfeiture of the property—though sentencing would depend on federal guidelines and judicial discretion.
Two DOJ officials told CNN that Bondi and senior Justice Department figures were “caught off guard” by Halligan’s move, which bypassed standard protocol. Halligan, who has been in her role for just over two weeks, reportedly presented the case directly to a grand jury without clearance from Main Justice.
The indictment marks yet another bold move by Halligan, a former private attorney known for her staunch loyalty to Trump. Her aggressive approach has already drawn headlines, including a recent push to reopen investigations into former FBI Director James Comey.
Letitia James has denied all wrongdoing, calling the charges “a politically motivated stunt” intended to retaliate for her prior legal actions against Trump. “This is about revenge, plain and simple,” she said in a statement Friday.
Behind the scenes, Bondi’s Justice Department is said to be experiencing internal friction over how the indictment was handled. Several senior officials are reportedly questioning Halligan’s decision to act without broader DOJ approval, raising concerns about process, oversight, and political optics.
James gained national attention for leading high-profile investigations into Trump’s business empire, drawing both praise and criticism for what many saw as a politically charged agenda. For Trump allies, her indictment marks a significant and symbolic moment—but others inside the DOJ worry it could fuel perceptions of partisan prosecution.
James’s legal team is expected to argue selective prosecution, pointing out that similar mortgage-related misrepresentations rarely result in criminal charges. Legal analysts note that proving criminal intent in such cases can be challenging—especially when the alleged falsehood concerns property use rather than direct financial misappropriation.
James is scheduled to be arraigned in federal court in Norfolk on October 24. While the indictment alone does not remove her from office, a felony conviction would trigger automatic removal under New York state law.
Attorney General Bondi is expected to meet with senior DOJ officials to review Halligan’s handling of the case and determine next steps.
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