By Sarah N. Lynch and Andrew Goudsward
WASHINGTON (Reuters) -Senior fraud investigators at Fannie Mae believed there was no clear evidence to prove that New York Attorney General Letitia James committed mortgage fraud, according to new information disclosed by James’ legal team in a filing on Monday.
The filing, which asks a federal judge to dismiss the criminal charges against James on the basis of outrageous government conduct, reveals some new details about how people inside Fannie Mae viewed the investigation into James and the role that Trump ally Bill Pulte, the nation’s top housing regulator, played in shaping the probe.
In June communications between Fannie Mae’s Director of Mortgage Fraud Sean Soward and Jennifer Horne, the vice president of financial crimes at Fannie, Soward expressed concern that the case was “certainly not clear and convincing evidence” of fraud, according to the filing.
James, an elected Democrat, faces charges of bank fraud and making a false statement to a financial institution for allegedly using a Virginia home as an investment property in violation of loan terms that required her to make it a secondary residence. She has pleaded not guilty.
She is one of several of President Donald Trump’s political foes facing criminal charges after he called on the Justice Department to act against them.
The case was opened after Pulte, who leads the Federal Housing Finance Agency, sent the department a criminal referral, and Attorney General Pam Bondi assigned pardon attorney and weaponization czar Ed Martin to help with the probe as a special assistant U.S. Attorney handling mortgage fraud cases involving public officials.
Trump later installed his former personal lawyer Lindsey Halligan to serve as U.S. Attorney for the Eastern District of Virginia to bring the indictment, after her predecessor refused to do so, citing a lack of evidence.
QUESTIONS OVER PULTE’S ROLE
In Monday’s filing, James’ attorneys raised questions about how Pulte gained access to their client’s non-public mortgage files. They noted that Pulte also sent Halligan a private letter on October 6, providing a summary of the information and financial calculations on the property at the heart of the indictment, as well as information from Fannie Mae’s financial crimes investigative team.
Not long afterward, Halligan went before a grand jury in Alexandria to present evidence, even though it was a different grand jury from the one in Norfolk, Va. that had been convened in the case earlier. When a two-count indictment was returned, it bore the “exact calculations Director Pulte had sent to Ms. Halligan just a few days prior,” her lawyers said.
“Director Pulte abused his position as FHFA Director to direct an investigation of AG James, outside of the normal processes and rules governing the agency, despite being told repeatedly that there was no evidence of wrongdoing,” the filing said.
Reuters previously reported that the White House earlier this month ousted the FHFA Acting Inspector General Joe Allen not long after he tried to provide prosecutors in the James case with crucial, constitutionally required discovery.
Citing that and other media reports in its filing, James’ attorneys said those disclosures had to date not been produced to the defense team.
The filing also raises concerns with Martin’s conduct, citing his decision to pose for photos outside of her Brooklyn home and a letter he sent her calling on her to resign as New York’s attorney general.
“The letter, by itself, violated Justice Department rules, the Principles of Federal Prosecution, and various codes of professional responsibility and ethics,” they wrote.
(Reporting by Sarah N. Lynch and Andrew Goudsward; Editing by Stephen Coates)
Comments