FHFA director refers Letitia James to DOJ a second time over alleged insurance fraud

Federal Housing Finance Agency Director William Pulte has again referred New York Attorney General Letitia James to the U.S. Department of Justice for criminal prosecution, alleging she may have falsified information on her homeowner's insurance application. It is the second time Pulte has turned over criminal referrals targeting James.

On Wednesday, Pulte sent letters to U.S. Attorney Jason Quinones in the Southern District of Florida and U.S. Attorney Andrew Boutros in the Northern District of Illinois, asking them to "authenticate and investigate" the allegations. The referrals center on insurance applications tied to a home in Norfolk, Virginia, and involve two insurers: Fort Lauderdale-based Universal Property Insurance and Illinois-based Allstate.

James, for her part, has accused President Trump and his administration of "weaponizing the justice system" and called the charges "baseless."

That's a familiar refrain from an attorney general who built her political career on lawfare against Trump, including a 2022 civil fraud suit seeking a $464 million judgment against his company. The difference is that James's legal crusades relied on creative theories about asset valuations. The allegations against her involve something far more straightforward: what she wrote on insurance forms.

What the applications allegedly show

According to two letters reviewed by Just the News, the alleged misrepresentations are specific and concrete. Pulte laid out the core claims in plain terms:

"[It] appears Ms. James made false representations that her property would be unoccupied five months out of the year."

"According to the post, this was false. The house was, in fact, occupied year-round by her niece."

It gets worse. Pulte's letters also allege that James misrepresented who was living in the home:

"[It] appears Ms. James made representations that the house would be occupied by a single adult, with no children. Instead, according to the post, she knew the house was actually occupied by four people - three children and her niece."

The niece in question, Nakia Thompson, reportedly told a grand jury that she lived rent-free in the Norfolk home for five years while she was wanted in North Carolina for failing to complete her probation, as Just The News reports.

One adult with no children on the application. Four people, including three children, actually living there. A property listed as unoccupied for nearly half the year that was occupied year-round. These are not ambiguities. They are either true or they aren't, as Just The News reports.

A case that keeps coming back

This is not Pulte's first attempt to bring these allegations to the attention of federal prosecutors. Last April, he sent a similar letter to Attorney General Pam Bondi and her deputy Todd Blanche alleging James falsified bank documents and property records.

That referral produced results. Later that year, a federal grand jury in the Eastern District of Virginia indicted James on charges of bank fraud and false statements to a financial institution. But the charges were dismissed after a judge ruled that the prosecutor, Lindsay Halligan, was not lawfully appointed. The grand jury declined to issue a new indictment after the disqualification.

Note what did not happen: the case was not dismissed on the merits. No court examined the evidence and found it lacking. A procedural defect ended the prosecution before it could reach the substance of the allegations. The underlying facts remain unresolved.

Pulte's new referrals, directed to U.S. Attorneys in Florida and Illinois rather than Virginia, appear designed to route around the earlier procedural failure. The focus has also shifted from bank fraud to insurance fraud, targeting the jurisdictions where the insurers are headquartered.

A pattern beyond James

Pulte, who oversees Freddie Mac, Fannie Mae, and the Federal Home Loan Banks, has made housing-related fraud referrals something of a specialty. James is not his only target.

Last July, he sent a criminal referral targeting Sen. Adam Schiff of California, alleging possible violations including government wire fraud, mail fraud, bank fraud, and false statements to a financial institution. The allegation: Schiff had repeatedly declared in mortgage and election filings that both of his homes, one in Maryland and the other in California, were his "principal residence." Freddie Mac rules are clear that a borrower can claim just one home as a primary residence, defined as the place where the borrower lives for the majority of the year. Schiff was never charged with any violations.

Last November, Pulte referred California Democratic Rep. Eric Swalwell to the Justice Department over allegations of mortgage and tax fraud, suggesting prosecutors probe mortgage fraud, state and local tax fraud, and insurance fraud related to several million dollars in loans and his claims of primary residence in both Washington, D.C. and California. Swalwell sued Pulte over the referral but later dropped the suit. Now, as Swalwell runs for governor in California, billionaire and fellow Democratic candidate Tom Steyer has sought to use the allegations to challenge Swalwell's candidacy, petitioning the California Secretary of State to enforce the state's residency requirements in the gubernatorial race.

Three high-profile Democrats. Three referrals. The common thread is not partisan targeting. It is a straightforward question: did these officials represent their housing situations honestly on federal documents?

The irony writes itself

Letitia James made her name pursuing Donald Trump over allegations that he inflated his assets. She argued that misrepresentations on financial documents, even when no lender claimed to have been harmed, warranted the full force of state prosecution and a nine-figure judgment.

Now she faces allegations that she misrepresented basic facts on insurance applications: who lived in her home, how many people were there, and whether the property was occupied. The attorney who argued that financial document integrity was so sacred it justified an unprecedented civil fraud case now dismisses her own alleged document problems as political overreach.

James wants this framed as retaliation. That framing requires ignoring the specifics. The allegations are not vague accusations or creative legal theories. They involve discrete, verifiable claims on insurance applications: how many occupants, how many months occupied, children or no children. These are questions with factual answers.

Attorney Mike Davis of The Article III Project has pointed to previously published court documents that he believes demonstrate James misled her home insurer when applying for coverage. The New York Post has reported on the details surrounding the Norfolk property and its occupants.

James can call this baseless. But "baseless" is a word that does a lot of heavy lifting when a grand jury already found enough evidence to indict, and the case only fell apart because of who brought it, not what it contained.

Federal prosecutors in Florida and Illinois now have the referrals on their desks. The question is simple: do the insurance applications match reality? If they do, James has nothing to worry about. If they don't, the attorney general who made document fraud her signature cause may find that the standard she championed applies to her too.