Gift-Wrapped for DOJ: How Letitia James and Her Attorney Delivered a Perfect Mortgage Fraud Prosecution

This is a step-by-step guide for how federal prosecutors can successfully indict and convict New York Attorney General Letitia James for mortgage fraud on her 604 Sterling Street, Virginia property.

There’s a critical element no one has considered: Letitia James could not obtain a 91.6% loan-to-value mortgage under Joint Tenancy with Right of Survivorship (JTWROS) unless both she and her niece certified the home as their primary residence. That wasn’t a suggestion—it was  legal requirement under Fannie Mae guidelines. Because of the joint title structure and minimal down payment, James’s sworn occupancy declaration wasn’t supplementary—it was the singular legal condition that made the loan possible. Without it, the financing would have failed.

Fifteen days earlier, she told her mortgage broker—on record—that she would not live there. That email was disclosed by her own attorney. She now calls the contradiction a “mistake.” But when the only way to secure a highly leveraged loan is by lying under oath, it’s not a mistake—it’s mortgage fraud. And the paper trail proves it.

This case doesn’t require inference. The documents convict her.

The Setup: A Virginia Property and a Financing Challenge

In the summer of 2023, Letitia James and her niece, Shamice Thompson-Hairston, decided to purchase a property together at 604 Sterling Street in Norfolk, Virginia. The three-bedroom, one-bathroom home was listed at $240,000—a modest price by New York standards but typical for that Norfolk neighborhood.

As we first reported in April, this Virginia transaction would prove far more consequential than a simple real estate purchase—it contained a sworn declaration that could invalidate James’s authority to hold office in New York.

Just 10 days after the Federal Housing Finance Agency formally referred her to the U.S. Department of Justice for potential mortgage fraud, her lawyer released the smoking gun email. FHFA Director William Pulte’s referral stated that James “falsified bank documents and property records to acquire government-backed assistance and loans and more favorable loan terms.”

From the start, this wasn’t structured as a typical investment. The property would be held in joint tenancy with right of survivorship—a form of ownership where both parties have equal, undivided interest in the entire property. When one owner dies, their interest automatically passes to the survivor. It’s a structure typically used by married couples or close family members who intend to share a primary residence.

To finance the purchase, they needed a mortgage. And here’s where the story gets interesting. They weren’t putting down 20–25% like typical investment property buyers. They were seeking maximum leverage—a loan of $219,780 on a $240,000 purchase. That’s a 91.6% loan-to-value ratio, with barely 8% down. That level of leverage triggers strict eligibility rules—and James’s own words made her ineligible.

As an approved Fannie Mae seller/servicer operating under federal GSE guidelines, AnnieMac qualifies as a federally-affiliated institution under 18 U.S.C. § 1014, which covers both federally insured and federally-affiliated financial institutions.

Any mortgage professional will tell you: that level of leverage on a jointly-owned property has only one path to approval—both borrowers must occupy it as their primary residence.

August 2, 2023: The Email That Started It All

On August 2, 2023, James sent an email to her mortgage broker, Mike Voci. In it, she laid out what she thought would be the arrangement:

This email is crucial for understanding what happened next. James believed she could be a non-occupant co-borrower—helping with the mortgage but not living there. It’s a common arrangement when parents help children buy homes or when one investor helps another.

August 3, 2023: The Broker’s Confirmation

The very next day, mortgage broker Mike Voci responded to James and confirmed two things: (1) her role was listed as a non-occupying co-borrower, and (2) the loan was locked as a primary residence product.

This response proves James’s August 2 intent was received, recorded, and reflected in the loan file. But the loan still moved forward under primary residence pricing—based on occupancy conditions that hadn’t been met.

August 17, 2023: The False Declaration

On August 17—just fifteen days after writing she would not live in the home—James signed a Specific Power of Attorney declaring:

That declaration contradicted everything she had previously stated—yet it was sworn under penalty of perjury, submitted as part of the underwriting file, and used to qualify the loan for terms she was not eligible to receive. It was witnessed by two high-level aides in the New York Attorney General’s Office: Jennifer S. Levy, Chief Deputy Attorney General for Social Justice, and Sharona Parchment, Executive Assistant.

This wasn’t confusion. It wasn’t a clerical error. The timeline shows a calculated progression: James told the truth on August 2, learned what was required for the loan to proceed, then deliberately lied under oath on August 17 to obtain financing worth over $100,000 in benefits she wasn’t entitled to receive.

Critical Understanding: The lender required James’s intent to occupy in the Power of Attorney—contradicting her prior emails—because that was the only way to proceed with the loan structure she wanted. Without her sworn occupancy declaration, the financing would have failed under GSE guidelines.

August 30, 2023: The Closing

With James’s false declaration in hand, the loan sailed through underwriting. On August 30, 2023, the transaction closed. The property was deeded to both James and Thompson-Hairston as joint tenants. The mortgage for $219,780 was recorded. And both borrowers were now legally obligated to establish residency within 60 days.

The clock started ticking. By October 30, 2023, both James and Thompson-Hairston were required to be living at 604 Sterling Street as their principal residence.

October 2, 2023: The Trump Trial Begins

On October 2, 2023—less than a month before her residency deadline—Letitia James stood on the courthouse steps in Manhattan to announce the start of her civil fraud trial against Donald Trump. She would be in court nearly every day for months. She would hold press conferences. She would give interviews.

She would do everything except move to Virginia.

Public records confirm James maintained her Brooklyn residence throughout this period. No change of address was filed. No Virginia voter registration. No Virginia tax filings. Most tellingly, no homestead exemption was ever filed in Virginia—a simple form that would have protected equity in her principal residence and confirmed her occupancy.

The lie was now complete. James had sworn she would establish principal residency, knowing she wouldn’t. She used that false declaration to obtain financing she wasn’t entitled to receive. And she never looked back.

The Underwriting Barrier: Regulatory Framework That Made James’s Declaration Legally Necessary

Letitia James and her niece purchased the home as joint tenants with right of survivorship (JTWOS), triggering specific Fannie Mae occupancy requirements that eliminate prosecutorial complexity about “intent” or “interpretation.”

Regulatory Mandate (No Lender Discretion):

According to Fannie Mae Selling Guide B2-1.1-01, while “only one borrower must occupy and take title to the property” in many standard cases, that exception does not apply when both borrowers are taking title jointly—as Letitia James and her niece did, under joint tenancy with right of survivorship. Because the loan was structured as joint tenancy with both borrowers taking title, and the LTV exceeded 91%, Fannie Mae rules required both borrowers to certify the property as their primary residence. Without Letitia James’ sworn declaration, the loan would have failed GSE eligibility standards

“Only one borrower must occupy and take title to the property, except as otherwise required for mortgages that have guarantors or co-signers”

—Fannie Mae Selling Guide B2-1.1-01

Why James’s Occupancy Declaration Was Legally Required:

• Without both borrowers’ occupancy certification, the loan was ineligible for GSE purchase
• AnnieMac, as a Fannie Mae seller/servicer, was contractually bound to follow these guidelines
• No alternative loan structure existed at this LTV ratio under GSE programs
• James’s occupancy declaration wasn’t supplementary—it was the singular requirement enabling the financing

To ensure this point is unmistakably clear for prosecutors and the public, here’s how occupancy, title, and LTV work together under Fannie Mae eligibility rules:

Prosecutorial Advantage: This eliminates any “misunderstanding” defense. The regulatory framework is binary: comply or the loan fails. James’s declaration wasn’t interpretation—it was the only path to approval.

The Uniform Deed of Trust used for such loans contains specific language that imposes a concrete residency requirement:

“Borrower shall occupy, establish, and use the Property as Borrower’s principal residence within 60 days after the execution of this Security Instrument and shall continue to occupy the Property as Borrower’s principal residence for at least one year.”

In mortgage law, when multiple borrowers sign jointly, each is individually “the Borrower” and must comply with all covenants.

^*Note: Fannie Mae’s guidelines are not optional suggestions—they are contractual requirements that lenders must follow to sell loans into the secondary market. AnnieMac cannot waive, ignore, or override these rules without losing its ability to sell the loan to Fannie Mae, which would fundamentally change the loan’s economics and availability.

What About AnnieMac’s “Expanded Access” Loans?

Some might claim AnnieMac could have approved James under a flexible non-agency program. But evidence from the time of her loan tells a different story.

AnnieMac’s Expanded Access program included “non-owner occupied” loans, but only under non-agency guidelines with:

• Higher rates and stricter terms
• No GSE sale eligibility
• No 91.6% LTV for non-occupant co-borrowers

James didn’t apply under those terms. She signed a declaration qualifying the loan for owner-occupied, GSE-conforming treatment—with the exact favorable terms she wasn’t entitled to.

That declaration wasn’t a clerical oversight. It was the legal key to unlock a category of financing that her true intent made unavailable.

Understanding the Financial Benefits: Why This Lie Was Worth Six Figures

With this regulatory requirement established—that James’s declaration wasn’t optional but mandatory for loan approval—we can now examine exactly what she gained by lying under oath. This isn’t about abstract concepts or technical violations. It’s about cold, hard cash—over $100,000 worth.

Note: Because the exact interest rate and fee structure of her closed loan are not publicly available, we estimated the financial benefit using prevailing market data from August 2023, published Fannie Mae Loan-Level Price Adjustment (LLPA) matrices, and AnnieMac’s historical GSE lending programs. All calculations reflect conservative assumptions that favor the defense.

The Legal Framework: Why “No Harm, No Foul” Is Legally False

Letitia James now claims her false statement was just a “mistake”—and since she’s made every payment on time, no real harm was done. But under federal law, that defense isn’t just wrong—it’s irrelevant.

What the Law Requires Under 18 U.S.C. § 1014

The federal statute governing mortgage fraud—18 U.S.C. § 1014—makes it a crime to “knowingly make any false statement…for the purpose of influencing in any way the action” of a federally insured or affiliated financial institution.

Four elements complete the crime:

1. ✓ A false statement (James’s sworn declaration of principal residence on August 17)
2. ✓ Made to a federally-affiliated financial institution (AnnieMac, an approved Fannie Mae seller/servicer)
3. ✓ Intended to influence the institution (qualify for owner-occupied mortgage terms)
4. ✓ Made knowingly and willfully (proved by her own August 2 email contradicting the sworn statement)

All four elements are met—and proven with her own words, filings, and attorney’s disclosure. Nothing else is required. Repayment of the loan, continued occupancy, or intent to deceive the public is not a defense.

Why Her “Still Paying” Defense Actually Strengthens the Case

James’s insistence that she is current on the mortgage payments doesn’t weaken the fraud case—it confirms it. She got the loan she wanted. She got the favorable rate. She got the reduced down payment. The false statement worked. That’s what makes it a prosecutable success.

Prosecutorial Reality: The DOJ doesn’t have to prove harm. They only have to prove she lied on purpose—and they already have the email, declaration, and benefit trail to do it.

Industry Standards: This Conduct Is Criminal

The Federal Housing Finance Agency, which referred James to the DOJ for prosecution, explicitly defines occupancy fraud as “falsely stating the borrower’s intent to live in a property to obtain more favorable loan terms than a second or investment home”—precisely what James did when she signed her false declaration.

The mortgage industry itself warns against exactly what James did. Industry publications explicitly state: “Never misrepresent your intention to occupy a property just to get better loan terms. Owner-occupied loan terms only apply to principal residences” and “Getting an owner-occupied loan and then not occupying the property is considered mortgage fraud because the borrower has obtained favorable loan terms under false pretenses.”

Federal Penalties: Up to 30 Years in Prison

The penalties for mortgage fraud are severe. Federal law provides for “imprisonment for up to 30 years per offense” for mortgage fraud violations. The penalties can include FBI investigation, and “if they discover you have committed occupancy fraud multiple times you can be fined several thousands of dollars”. Additionally, “Cases may be referred to the FBI for investigation and eventual prosecution. If proven guilty, borrowers may be subject to prison time”.

The Real Harm: A System Corrupted

But let’s address James’s “no harm” claim directly. Her fraud didn’t occur in a vacuum. It caused measurable, systemic damage:

Preempting the “Complexity” Defense

This case is simpler than most because:

• No circumstantial evidence needed: The August 2 email is a written confession of intent
• No complex financial analysis required: The benefit is easily quantifiable and substantial
• No disputed facts: James has now publicly admitted she never became a Virginia resident and hasn’t claimed to have moved or filed any corrective documents
• No coordination conspiracy: This is individual occupancy fraud with clear personal benefit
• No technical mortgage mechanics: Standard GSE loan with standard occupancy requirements

James had three options when faced with lender requirements:

1. Pay investment property terms: Accept higher rates, larger down payment, show reserves
2. Actually move to Virginia: Honor her sworn declaration and establish residency
3. Commit fraud: Lie under oath to obtain favorable terms she wasn’t entitled to

She chose option three. The August 2 email proves she knew she was lying. The August 17 declaration proves she did it anyway. And now, she has publicly admitted she never moved, never became a Virginia resident, and never filed a homestead exemption—confirming that the fraud was not just deliberate but acknowledged.

Unlike typical mortgage fraud cases that require juries to infer intent from complex patterns, this case provides direct evidence: You have written proof of intent (the email), written proof of the false statement (the Power of Attorney), and written proof of the benefit obtained (the mortgage documents). The defense will try to complicate what is fundamentally straightforward fraud.

Pattern Evidence: This Wasn’t an Isolated Mistake

What transforms this from a potential isolated error into a clear pattern of systematic misconduct is James’s documented history of similar misrepresentations across multiple properties and decades. This pattern evidence would be devastating in any prosecution:

Prosecutorial Advantage: This pattern evidence shows the Virginia declaration wasn’t an innocent mistake—it was part of a long-term approach to mortgage applications. Under Federal Rule of Evidence 404(b), this “other acts” evidence would likely be admissible to prove “motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.”

April 24, 2025: How James’s Own Attorney Sealed Her Fate

The most astonishing development in this case didn’t come from a whistleblower or FOIL request—it came from Letitia James’s own attorney.

After the FHFA referred James to the DOJ for criminal investigation on April 14, 2025, her attorney, Abbe Lowell—former White House ethics counsel—submitted a letter on April 24 in an apparent attempt to shut down the inquiry.

Included in that letter was a copy of the August 2, 2023 email from James to her broker, where she wrote in all caps: “This property WILL NOT be my primary residence.” Lowell’s theory seemed to be that this statement showed candor—and proved the false declaration on the Power of Attorney filed 15 days later was an innocent mistake.

But this strategy backfired spectacularly. Rather than exonerate James, the August 2 email created a paper trail of intent that undermined her entire defense. The sequence is now inescapable:

• August 2: James says she won’t live in the Virginia property
• August 3: Broker confirms she’s marked as non-occupant, but the loan is still classified—and priced—as a primary residence
• August 17: James signs a sworn declaration stating she intends to occupy it as her principal residence

Lowell’s submission didn’t just fail to end the investigation—it gave federal prosecutors the very document that proves James’s sworn statement was knowingly false. In most mortgage fraud cases, prosecutors must infer intent through circumstantial evidence. Here, they have it in writing—hand-delivered by the defense.

Federal Precedents: Prosecution Pattern and Sentencing Guidelines

Federal courts regularly convict borrowers for exactly this conduct—often with less evidence and smaller benefits:

Unique Prosecutorial Advantages in James Case:

1. Written confession: August 2 email eliminates need for circumstantial evidence
2. Larger benefit: $100K+ exceeds previous cases
3. Public official: Enhanced penalties under sentencing guidelines
4. Pattern evidence: Brooklyn property shows systematic approach

Sentencing Guidelines Application:
Under USSG §2B1.1, enhancement factors include:

• Loss amount $100K+ (4-level enhancement)
• Abuse of position of trust (2-level enhancement)
• Pattern of activity (2-level enhancement)

Estimated guideline range: 24–30 months

The Bottom Line: This Wasn’t a Mistake

Let’s review what happened:

1. August 2: James emails that she won’t live in the property
2. August 3: Broker confirms she’s listed as non-occupant but loan is locked as primary residence
3. August 17: James swears under oath she will occupy it
4. August 30: Loan closes based on that declaration
5. October 2: James is in court in Manhattan for Trump trial—not in Virginia
6. Present day: Letitia James has publicly admitted she never became a Virginia resident, never moved to the property, and never filed a homestead exemption—confirming what the documents already proved.

This wasn’t confusion. It wasn’t a clerical error. It was a calculated lie for financial gain—worth over $100,000 in immediate benefit.

Letitia James built her career prosecuting financial fraud and won a $355 million judgment against Donald Trump for misrepresenting real estate. But she did the exact same thing—under oath, on a federally regulated loan, and for personal benefit.

When I was CFO of Crazy Eddie, I once told myself our frauds were victimless because we paid our bills. I was wrong. James is telling herself the same lie now. But fraud is fraud—whether you’re inflating inventory or lying about where you live.

The August 2 email proves this wasn’t a mistake. It was mortgage fraud. And thanks to her own attorney, the evidence is undeniable.

If this were anyone else, she’d be the one prosecuting.