The U.S. Justice Department sought to revive a collapsed criminal case against New York Attorney General Letitia James by asking a grand jury in Alexandria, Virginia, to approve a revised indictment that included an additional felony charge, court records show. The effort failed, with grand jurors rejecting all proposed charges.
The new indictment attempt, added a third felony count of making a false statement to a financial institution. Earlier versions of the case accused James of one count of bank fraud and one count of making false statements.
Each charge carries a potential sentence of up to 30 years in prison and fines of up to $1 million, though federal sentencing guidelines typically result in far lighter penalties, particularly for defendants without criminal records.
Prosecutors also asked a magistrate judge to seal records related to the failed indictment after the grand jury returned a “no true bill,” meaning it declined to bring charges. U.S. Magistrate Judge William Porter denied that request, noting that the rejection of the indictment was presented in open court and that details of the case had already leaked to the media.
“The Court will not speculate why the grand jury disclosed the no bill in open court,” Porter wrote in an order issued Monday. He added that public disclosure served the interest of transparency, especially given that the allegations against James were already widely known and the grand jury’s decision had been reported before the foreperson formally appeared in court.
Prosecutors had argued that sealing the records would protect the secrecy of grand jury proceedings and shield the accused from the burden of public scrutiny where there was no likelihood of guilt.
While Porter temporarily paused his ruling to allow prosecutors time to appeal, court records do not indicate that any appeal has been filed.
A spokesperson for James pointed to a statement from her lead attorney, Abbe Lowell, who sharply criticized the prosecution. “For the second time in seven days, the Department of Justice has failed in its clear attempt to fulfill President Trump’s political vendetta against Attorney General James,” Lowell said. “This unprecedented rejection makes even clearer that this case should never have seen the light of day.”
The Justice Department declined to comment.
The failed attempt in Alexandria followed a turbulent legal path.
James, a Democrat and a frequent critic of President Donald Trump, was initially indicted by a grand jury in October on one count of bank fraud and one count of making false statements to a financial institution. She pleaded not guilty to the charges.
However, a judge dismissed that case last month after ruling that Lindsey Halligan, the U.S. attorney appointed by President Donald Trump to handle the matter, had been unlawfully appointed.
After that dismissal, prosecutors turned to a grand jury in Norfolk, Virginia, which also declined to bring charges. In that instance, the magistrate judge recorded the rejection publicly but did not identify James as the target or release details of the proposed indictment.
The original case centered on claims that James misrepresented her intentions for a single-family home she purchased in Norfolk in 2020, allegedly stating it would be a second residence rather than a rental property. Legal experts criticized the case as flawed, noting that James’ mortgage agreement did not bar renting the home.
In the latest failed indictment, prosecutors shifted focus away from whether the property could be rented and instead alleged that James did not personally occupy the home or use it as a legitimate second residence.
The revised charges split the alleged false statements into two counts tied to separate documents: a “second home rider” attached to the mortgage and an affidavit of occupancy.
The new proposal also removed references to First Savings Bank, which later acquired the loan, and dropped a previous demand that James forfeit nearly $19,000 allegedly gained by declaring the property a second home. While forfeiture was still sought, no specific amount was listed.
The proposed indictment named four prosecutors: Halligan; Deputy Attorney General Todd Blanche; First Assistant U.S. Attorney Robert McBride; and Assistant U.S. Attorney Roger Keller Jr. Judge Porter noted that Keller, who signed the rejected indictment, was not present in court when the grand jury’s decision was formally delivered.
James has consistently denied wrongdoing and pleaded not guilty to the initial charges, calling the prosecution politically motivated. With multiple grand juries now declining to indict her, the future of the case remains uncertain.
