Grand Jury Declines to Indict AG James 12/05 06:09

   

   NORFOLK, Va. (AP) -- The Justice Department failed Thursday to secure a new 
indictment against New York Attorney General Letitia James after a judge 
dismissed the previous mortgage fraud prosecution encouraged by President 
Donald Trump, according to people familiar with the matter.

   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. But grand jurors rejected prosecutors' request 
to bring charges.

   It's the latest setback for the Justice Department in its bid to prosecute 
the frequent political target of the Republican president.

   Prosecutors are expected to try again for an indictment, according to one 
person familiar with the matter who spoke on the condition of anonymity because 
they were not authorized to publicly discuss the case.

   James was initially charged with bank fraud and making false statements to a 
financial institution in connection with a home purchase in Norfolk, Virginia, 
in 2020. Lindsey Halligan, a former White House aide and Trump lawyer, 
personally presented the case to the grand jury in October after being 
installed as U.S. attorney for the Eastern District of Virginia amid pressure 
from Trump to charge Comey and James.

   James has denied any wrongdoing and accused the administration of using the 
justice system to seek revenge against Trump's political opponents. In a 
statement Thursday, James said: "It is time for this unchecked weaponization of 
our justice system to stop."

   "This should be the end of this case," her attorney, Abbe Lowell, said in a 
statement. "If they continue, undeterred by a court ruling and a grand jury's 
rejection of the charges, it will be a shocking assault on the rule of law and 
a devastating blow to the integrity of our justice system."

   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.

   Rather than using the home as a second residence, James rented it out to a 
family of three, allowing her to obtain favorable loan terms not available for 
investment properties, prosecutors alleged.

   It's the latest example of pushback by grand jurors since the beginning of 
the second Trump administration. It's so unusual for grand jurors to refuse to 
return an indictment that it was once said that prosecutors could persuade a 
grand jury to "indict a ham sandwich." But the Justice Department has faced 
setbacks in front of grand juries in several recent cases.

   Even if the charges against James are resurrected, the Justice Department 
could face obstacles in securing a conviction against James.

   James' lawyers separately argued the case was a vindictive prosecution 
brought to punish the Trump critic who spent years investigating and suing the 
Republican president and won a staggering judgment in a lawsuit alleging he 
defrauded banks by overstating the value of his real estate holdings on 
financial statements. The fine was later tossed out by a higher court, but both 
sides are appealing.

   The defense had also alleged "outrageous government conduct" preceding her 
indictment, which the defense argued warrants the case's dismissal. The judge 
hadn't ruled on the defense's arguments on those matters before dismissing the 
case last month over the appointment of Lindsey Halligan as U.S. attorney.

   U.S. District Judge Cameron McGowan Currie took issue with the mechanism the 
Trump administration employed to appoint Halligan to lead one of the Justice 
Department's most elite and important offices.

   Halligan was named as a replacement for Erik Siebert, a veteran prosecutor 
in the office and interim U.S. attorney who resigned in September amid Trump 
administration pressure to file charges against both Comey and James.

   The following night, Trump said he would be nominating Halligan to the role 
of interim U.S. attorney and publicly implored Attorney General Pam Bondi to 
take action against his political opponents, saying in a Truth Social post 
that, "We can't delay any longer, it's killing our reputation and credibility" 
and "JUSTICE MUST BE SERVED, NOW!!!"

   Comey was indicted three days after Halligan was sworn in by Bondi, and 
James was charged two weeks after that.

   The Justice Department had defended Halligan's appointment but has also 
revealed that Bondi had given Halligan a separate position of "Special 
Attorney," presumably as a way to protect the indictments from the possibility 
of collapse. But Currie said such a retroactive designation could not save the 
cases.