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A senior federal prosecutor in Virginia has informed her colleagues that she finds no basis there is legal grounds to pursue criminal mortgage fraud charges against New York Attorney General Letitia James, per a source knowledgeable about the situation.

The prosecutor, Elizabeth Yusi, who supervises major criminal cases in the Norfolk office for the U.S. Attorney for the Eastern District of Virginia, plans to imminently present her conclusion to Lindsey Halligan, a supporter of Trump who was appointed as the U.S. Attorney for the Eastern District of Virginia last month.

The Justice Department declined to comment on the matter. The U.S. Attorney’s Office for the Eastern District of Virginia also ignored a request for comment.

Major Dispute Between DOJ and Trump

This case signals another major confrontation between the Justice Department and Trump, who has previously removed attorneys who declined to take action against his critics. Halligan, who possesses no prosecutorial experience, was appointed to the role following pressure from Trump after her former office holder concluded there was no probable cause to file criminal charges against James Comey, the previous FBI director.

Trump has publicly demanded the U.S. Attorney General to take legal action against James, who led a civil fraud case against the ex-president that resulted in a massive fine, though the decision was subsequently reversed by a New York state appellate court.

Loan Fraud Allegations and Investigation

William Pulte, the Federal Housing Finance Agency head and a strong Trump ally, made a legal complaint against James to the Justice Department in April, asserting she may have committed mortgage fraud. Pulte cited mortgage documents related to a 2023 Norfolk, Virginia, home that James supported the acquisition of for her niece, in which James appeared to indicate on a document that she intended to use the home as her principal dwelling. James was serving as the Attorney General of New York at the time.

Prosecutors assembled a grand jury in May to examine the matter but faced difficulties building a case against James, notwithstanding urging from Trump allies. Electronic correspondence from the time of the home purchase and other mortgage documents reveal James directly noting that she did not intend for the home to be her primary residence. This evidence poses a challenge for prosecutors to prove that James deliberately falsified on the mortgage documents.

Recent Changes in Legal Division

Multiple prosecutors in the Eastern District of Virginia have faced termination or stepped down in recent weeks as Trump has ramped up pressure on the office to bring charges against Comey and James.

Erik Siebert, Halligan’s predecessor, left his position on September 19 after facing pressure from Trump to file charges. Maya Song, a top deputy to Siebert, was also terminated in late September. Michael Ben’Ary, a leading national security prosecutor in the office, was similarly dismissed last week after unfounded accusations from a pro-Trump media personality.

“The leadership is preoccupied with penalizing the President’s opponents than they are with protecting our national security,” he stated in his final message to colleagues.

“Justice for Americans harmed by our enemies should not be subject to what someone in the Department of Justice reads in their social media feed that day.”