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DOJ investigating N.Y. AG's office and Sen. Adam Schiff [1]
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Date: 2025-08-12 13:49:28.197000+00:00
U.S. Attorney General Pam Bondi has appointed a “special attorney” to probe mortgage fraud allegations against Sen. Adam Schiff, D-Calif., and New York Attorney General Letitia James, two administration officials told NBC News.
The Justice Department is also in the initial stages of an investigation of James over her successful civil fraud case against President Donald Trump, according to three people familiar with the matter.
Bondi tapped Ed Martin, a conservative activist and former interim U.S. attorney for Washington, D.C., as special attorney to investigate Schiff and James, both prominent Democratic opponents of the president, the two administration officials said.
A senior law enforcement official said a grand jury seated in the Eastern District of Virginia will investigate the James mortgage fraud allegations and a grand jury in Maryland will investigate the allegations against Schiff.
Martin met Friday morning with Federal Housing Finance Agency Director Bill Pulte, who sent a criminal referral for the California senator to the Justice Department in May, the administration officials said. Pulte sent a referral for James in April, prompting the Justice Department to open an investigation into allegations that she made false statements on mortgage loan applications.
Trump had previously called for both Democratic officials to be prosecuted because of the mortgage fraud allegations.
Schiff and James have denied wrongdoing.
Preet Bharara, who is representing Schiff, said in a statement Friday that the allegations against the senator “are transparently false, stale, and long debunked.”
Schiff previously blasted Trump’s claims in a video statement in July. “This is the kind of stuff you see tinpot dictators do. It is designed to intimidate his political opponents and somehow try to silence them,” he said then.
The U.S. attorney’s probe of James is focused on whether her office used its authority to violate Trump’s legal rights through its civil lawsuits against the president and his businesses, according to three people familiar with the matter.
That investigation is also looking at whether the National Rifle Association’s rights were violated by her civil suits, the three sources said. It is being run out of the U.S. Attorney’s Office for the Northern District of New York, two of those sources said.
In response to an NBC News inquiry, a spokesperson for the attorney general’s office said: “Any weaponization of the justice system should disturb every American. We stand strongly behind our successful litigation against the Trump Organization and the National Rifle Association, and we will continue to stand up for New Yorkers’ rights.”
A spokesperson for the U.S. attorney’s office did not return a request for comment.
James, a Democrat, successfully sued Trump and his company over what her office said were fraudulent misrepresentations of his wealth and financial statements. A judge awarded James’ office over $300 million in the case, an amount that’s since swelled to over $500 million with interest. Trump is appealing the judgment.
James’ office also sued the NRA and its leadership with mixed results. The attorney general had sought the dissolution of the NRA in what is commonly referred to as the corporate “death penalty,” but a judge struck down those claims.
In 2024, James’ office did win its civil corruption case against the longtime head of the NRA, Wayne LaPierre, with a jury finding him liable for diverting millions of dollars from the gun group for his own personal lifestyle.
The gun group said it was “gratified” to find out about the investigation.
“She uses her powers as an elected official to try, in her words, to ‘dissolve the organization in its entirety,’ thus silencing the voice of millions of our members,” NRA Executive Vice President and CEO Doug Hamlin said in a statement. “That she now expresses concerns over ‘weaponization’ is the height of hypocrisy — an utter lack of self-awareness at the very least.”
It is not immediately clear how far along the DOJ investigation into James’ office is and what evidence, if any, the Justice Department has gathered in the probe.
An attorney for James, Abbe Lowell, said the probe of James’ fraud case against Trump and his businesses “has to be the most blatant and desperate example of this administration carrying out the president’s political retribution campaign.”
“Weaponizing the Department of Justice to try to punish an elected official for doing her job is an attack on the rule of law and a dangerous escalation by this administration,” he added.
The FBI and Justice Department began its probe of the mortgage fraud allegations against James in the spring. It’s unclear why Martin is now in charge of the review.
Martin served as Trump’s interim U.S. attorney for Washington, D.C., earlier this year, but his nomination was withdrawn after Republican senators expressed concerns over his association with Jan. 6 rioters. Trump then announced in May that Martin was moving to the Justice Department to serve as director of a “weaponization working group.”
Martin did not comment on the Friday appointment.
In his statement defending Schiff, Bharara criticized Martin, calling him “the most brazenly partisan and politically compromised person possible for the task.”
“Any supposed investigation led by him would be the very definition of weaponization of the justice process,” said Bharara, who served as U.S. attorney for the Southern District of New York before being fired by Trump during his first term in office.
Lowell pushed back on the allegations against James in an April letter to Bondi, acknowledging there were some mistaken forms while noting contemporaneous letters and forms showing that James submitted the correct information.
The letter called the “threadbare allegations” the “next salvo in President Trump’s revenge tour against Attorney General James.”
In addition to her fraud case against Trump and his companies, James and her office have launched a number of successful legal challenges to his administration’s agenda, dating back to his first term in office.
Trump has maintained that James is biased against him. In 2021, he sued to stop her from proceeding with her fraud investigation, saying, “Her mission is guided solely by political animus and a desire to harass, intimidate, and retaliate against a private citizen who she views as a political opponent.” The lawsuit also alleged that Trump was the victim of “viewpoint discrimination.”
Trump later dropped the suit, but has continued to criticize James, including in an April Truth Social post that called her a “wacky” and “totally corrupt politician” who should immediately resign.
CORRECTION (Aug. 12, 2025, 9:47 a.m. ET): An earlier version of this article misidentified the case against LaPierre. It was a civil corruption case, not a civil fraud case.
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[1] Url:
https://www.nbcnews.com/politics/justice-department/doj-opens-investigation-new-york-ags-office-brought-fraud-case-trump-rcna223731
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