New mortgage fraud indictment against James is rejected

The Justice Department failed Thursday to secure a new indictment against New York Atty. Gen. Letitia James after a judge dismissed the previous mortgage fraud prosecution encouraged by President Trump, according to a person familiar with the matter.

- BY ALANNA DURKIN RICHER AND OLIVIA DIAZ

Prosecutors went back to a grand jury in Virginia after a judge’s ruling halting the prosecution of James and another longtime Trump foe, former FBI Director James Comey, on the grounds that the U.S. attorney who presented the cases was illegally appointed.

The Justice Department could go back to the grand jury to try again. The person spoke on the condition of anonymity because they were not authorized to discuss the matter.

James was initially charged in October by the U.S. attorney installed by the Trump administration to replace the prosecutor who resigned under pressure to bring criminal cases against Comey and James.

James denied any wrongdoing and accused the administration of using the justice system to seek revenge against Trump's political opponents.

The allegations related to James’ purchase of a modest house in Norfolk, where she has family. During the sale, she signed a standard document called a “second home rider” in which she agreed to keep the property primarily for her “personal use and enjoyment for at least one year,” unless the lender agreed otherwise.