(TNND) — Legal and business experts are skeptical that New York Attorney General Letitia James’ mortgage fraud indictment will result in a serious penalty or even a conviction.
And they questioned the motivation to charge James, a political opponent of President Donald Trump.
“It’s a miscarriage of justice,” said Tamara Lave, a law professor at the University of Miami and a former public defender. “It’s an abuse of power.”
Trump’s recently appointed prosecutor for the Eastern District of Virginia secured a grand jury indictment Thursday against James on two counts, one for bank fraud and another for making false statements to a financial institution.
U.S. Attorney Lindsey Halligan accused James of lying on loan paperwork about using a $137,000 three-bedroom, one-bathroom home she bought in 2020 as a secondary residence rather than a rental.
She alleged that James’ misrepresentation allowed her to obtain favorable loan terms not available for investment properties. And that allegedly gave James “total ill-gotten gains” of about $19,000 over the life of the home loan.
“No one is above the law,” Halligan said in a news release. “The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public’s trust. The facts and the law in this case are clear, and we will continue following them to ensure that justice is served.”
James responded that she’ll fight the charges, calling them political retribution carried out by a prosecutor who is “blindly loyal” to the president.
James has a long history of legal fights with Trump, including her big victory in a civil fraud case last year against Trump and his business organization.
James accused Trump in that case of falsely inflating his net worth to enrich himself. She said he cheated to get better loans.
The James indictment comes two weeks after the Justice Department brought criminal charges against another long-time Trump foe, former FBI Director James Comey.
And both indictments follow public statements made by Trump, seemingly urging his Justice Department to go after his political opponents whom he called “guilty as hell.”
Business professor Jay Zagorsky said it appears to him that both Trump and James have used the law to go after political opponents.
“They’re basically both going after each other using roughly the same kind of laws,” he said. “And the question is, who does this serve? And as a member of the general public, I don’t think it serves me.”
Zagorsky, a professor with the Questrom School of Business at Boston University, said mortgage fraud isn’t often pursued by prosecutors.
He pulled figures from the U.S. Sentencing Commission that showed fewer than 3,000 people were convicted of federal mortgage fraud over the last 12 years.
At the same time, his research found that almost 100 million new mortgage loans were written to purchase or refinance a home.
Just 38 people were sentenced for federal mortgage fraud last year.
Just 34 were convicted the year before that.
And he said the punishments for the few who are prosecuted aren’t anywhere near the maximum statutory penalties of 30 years in prison and a $1 million fine.
Since 2013, 15% of those convicted got no jail time, he found.
And the average sentence for people who did get prison time was 21 months.
“No one cares, except when it’s the ability to take down one of your political opponents,” Zagorsky said.
Lave said federal prosecutors typically have their cases very buttoned up before pursuing charges, with the benefit of the FBI to thoroughly investigate.
“It just doesn’t appear that they did that at all here, which is the hallmark of vindictive prosecution, where you’re not paying attention to what the merits of the case are,” she said, “you’re paying attention to what the person in charge wants.”
Lave questioned the merits of this indictment.
And she noted that Trump-appointee Halligan, who has no prosecutorial experience, was brought in to secure the indictments after the previous U.S. attorney Erik Siebert was pushed out and career prosecutors in the Eastern District of Virginia reportedly declined to handle the cases.
Lave said she’s doubtful the James case will result in a conviction.
She said both James and Comey, who is accused of making a false statement to Congress and obstruction of a congressional proceeding, appear ready to fight their charges in court if they can’t get their cases dismissed as vindictive prosecution.
Lave said it’s much easier to secure a grand jury indictment than a conviction.
A grand jury is not an adversarial hearing, she said. The defense isn’t there to put on any witnesses or cross-examine anybody.
The standard for an indictment is just probable cause, she said.
That’s a significantly lower threshold than prosecutors must meet at a criminal trial, during which they must convince a jury of the defendant’s guilt beyond a reasonable doubt.
Lave said the James and Comey cases appear to be pursued for similar reasons, even if the facts in the cases are different. She added that the charges in the James case should be less complicated to either prove or disprove than the charges in the Comey case.
