ReportWire

Tag: mortgage fraud

  • Claim misleads about ‘mortgage fraud’ on Trump’s Cabinet

    As the Trump administration weighs mortgage fraud charges against Democrats, Trump’s critics accused the administration of enforcing a double standard.

    Trump has frequently described his desire for revenge on past antagonists. On Oct. 9, federal prosecutors in Virginia secured a grand jury indictment against New York Attorney General Letitia James on charges related to mortgage fraud. James prosecuted Donald Trump in a civil case in New York between his two presidential terms. She has maintained her innocence.

    Dan Koh, a onetime aide to former President Joe Biden who now hosts “The People’s Cabinet” podcast, criticized Trump and his administration during an Oct. 9 appearance on CNN’s “Newsnight with Abby Phillip,” hours after James’ indictment became public. (On Oct. 16, Koh announced he was running for the U.S. House in Massachusetts’ 6th district.)

    During the show’s roundtable, Koh said prosecutors are “accusing Letitia James of this mortgage fraud. There are three Cabinet members who committed mortgage fraud that he’s just letting fly.”

    Koh told PolitiFact he was referencing a Sept. 4 article by the investigative news organization ProPublica. The article said three Cabinet members — Labor Secretary Lori Chavez-DeRemer, Transportation Secretary Sean Duffy and Environmental Protection Agency Administrator Lee Zeldin — had each declared more than one home as their principal residence.

    Sign up for PolitiFact texts

    We found no news reports or statements from government officials about any of the three Cabinet members being targeted for prosecution for mortgage-related actions. 

    Legal experts have criticized James’ prosecution as questionable, given that scenarios like hers — involving modest amounts of money and given the difficulty of proving intent to defraud — are rarely prosecuted.

    However, Koh overstepped when he said the three Cabinet members had “committed mortgage fraud.” 

    The original documents ProPublica published show the mortgage agreements required the Cabinet members to make the homes their principal residences for a year. There’s no information showing they failed to do that. None has been charged, much less convicted, of mortgage fraud. (James hasn’t been convicted either.)

    What is James charged with?

    James is one of three Democratic figures — along with Federal Reserve Board member Lisa Cook and Sen. Adam Schiff, D-Calif. — who have faced administration challenges over alleged mortgage fraud. Cook and Schiff deny the allegations as well.

    Each stands accused of attesting on legal documents that they were seeking mortgages for houses that qualified for more favorable interest rates than they otherwise would have received. Declaring that a home is a principal residence, for instance, typically allows the borrower to secure a lower interest rate than if it’s a secondary residence. A secondary residence can secure a lower rate than an investment property does.

    James’ indictment charges her with bank fraud and making false statements to a financial institution in connection with paperwork she filed for a house she purchased in Norfolk, Virginia. 

    According to the indictment, she signed a form that said she had to use the house as a second residence. Instead, the indictment said, James rented the house to a family of three. 

    James has maintained her innocence. News accounts and a letter from James’ attorney, written in April as the government was considering whether to file charges, stated that the renters were family members, and that in most years she did not charge them rent. The lawyer’s letter also said the government “cherry picked” paperwork and ignored other documents that accurately described her role. 

    Legal experts also say the bar for proving intent to deceive is high in cases like this, and the amount of money at stake would not normally lead to a prosecution. The indictment says James stood to save “approximately $17,837,” which would work out to $50 a month over the life of the 30-year loan, NBC News reported. If convicted, James could face up to 30 years in prison per count; up to a $1 million fine on each count; and forfeiture of the house. 

    What are the three Cabinet members accused of doing?

    ProPublica obtained the signed mortgage forms for six houses belonging to the three Cabinet members. The outlet said it had located the documents “while examining financial disclosure forms, county real estate records and publicly available mortgage data provided by Hunterbrook Media.” 

    Each of the three Cabinet members’ scenarios is slightly different. But in each case, the Cabinet member and a spouse signed paperwork for one house they described as their principal residence, then later signed paperwork for another house that they also described as their principal residence.

    According to ProPublica, the three Cabinet member examples were as follows:

    • DeRemer and her husband signed forms for principal-residence mortgages in both Arizona (2017) and Oregon (2021).

    • Duffy and his wife signed forms for principal-residence mortgages in both New Jersey (2021) and Washington, D.C. (2025).

    • Zeldin and his wife signed principal-residence mortgages in New York (2007) and Washington, D.C. (2024).

    ProPublica contacted each department that the Cabinet members represent, and each one, as well as the White House, denied any wrongdoing on behalf of the Cabinet members. 

    The terms of three Cabinet members’ agreements show no breaches

    Based on our review and discussions with experts, signing two forms citing a different house as one’s “principal residence” doesn’t, on its own, amount to a breach of the agreements’ terms.

    That’s because all six forms included an “occupancy” section saying the borrowers agreed to use the house as their “principal residence” within 60 days and for at least one year after the date of occupancy, “unless extenuating circumstances exist which are beyond” the borrower’s control. 

    “The occupancy covenant is only for one year,” said Adam Levitin, a Georgetown University law professor. 

    The three Cabinet members each signed a subsequent mortgage more than a year after signing the first one.

    “If the later mortgage is for a property that is actually the borrower’s principal residence for the year after that mortgage, there’s no problem, and nothing needs to be amended with the first property’s mortgage,” Levitin said.

    There’s also some wiggle room on having two principal residences simultaneously, Levitin said. “There are certainly circumstances in which a borrower might think of himself as having two or more principal residences, such as Mar-a-Lago and the White House” for Trump.

    Assessing Koh’s characterization

    Koh is wrong to say that any of the Cabinet members “committed mortgage fraud.” Not only have the Cabinet members not been charged with or convicted of any crimes, but also a plain reading of the mortgage documents would argue that signing two agreements listing different principal residences would not violate the agreements, because of the one-year clause.

    Koh told PolitiFact that his comment’s focus was on the latter point, about the contrast in how these cases were being treated.

    “To be clear, I think all of these accusations are a stretch at best, but I’m highlighting the hypocrisy and the administration’s failure to apply the same standard to all cases,” Koh said.

    Despite his inaccurate wording, Levitin said it’s “reasonable” for Koh to point out that James and other Democrats are drawing more intense scrutiny than the three Cabinet members are for common — and rarely prosecuted — mortgage actions.

    Our ruling

    Koh said that as the Trump administration pursues mortgage fraud charges against Letitia James, “there are three Cabinet members who committed mortgage fraud that he’s just letting fly.”

    Experts say mortgage fraud cases like the one against James are rarely prosecuted. But Koh’s description of the three Cabinet members’ situations is misleading.

    ProPublica published documents that show that three Trump Cabinet members signed mortgage paperwork classifying separate residences as their principal residences. But the documents also show the mortgages required them to make the homes their principal residences for a year. There’s no information showing they failed to do that. None of the Cabinet members have been charged with or convicted of mortgage fraud.

    The statement contains an element of truth but leaves out facts that would give a different impression, so we rate it Mostly False.

    Source link

  • New York Attorney General Letitia James indicted for alleged mortgage fraud

    This two-count indictment of New York attorney General Letitia James accuses her of bank fraud and of making false statements to *** financial institution. Specifically, it alleges that she intentionally misrepresented *** rental property as her secondary residence to obtain better mortgage terms. James is *** longtime foe of President Donald Trump. Last year she won *** civil lawsuit alleging that the president and his company overstated real estate values. Now the president has publicly urged the Justice Department to prosecute James and other political opponents. In *** video message yesterday, James said this indictment is part of the president’s desperate weaponization of our justice system. These charges are baseless. And the president’s own public statements make clear. That his only goal is political retribution at any cost. Lindsay Halligan, US attorney for the Eastern District of Virginia, wrote in *** statement, quote, No one is above the law. The charges, as alleged in this case, represent intentional criminal acts and tremendous breaches of the public’s trust, unquote. Now if convicted, James faces up to 30 years in prison per count. She’s expected to make her first appearance in federal court on October 24th at the White House, I’m Jackie DeFusco.

    New York Attorney General Letitia James indicted for alleged mortgage fraud

    New York Attorney General Letitia James is the latest political foe of President Donald Trump to face federal charges.

    Updated: 8:01 AM EDT Oct 10, 2025

    Editorial Standards ⓘ

    New York Attorney General Letitia James is the latest political foe of President Donald Trump to face federal charges. A federal grand jury indicted James on charges of bank fraud and making false statements to a financial institution. The indictment accuses her of intentionally misrepresenting an investment property in Norfolk, Virginia, as her secondary residence to obtain better mortgage terms.In a video statement on Thursday, James said the indictment is part of the president’s “desperate weaponization of our justice system.””These charges are baseless. And the president’s own public statements make clear that his only goal is political retribution at any cost,” James said. Trump has publicly urged the Justice Department to prosecute James and other political opponents. In a Truth Social post last month that was directed at Attorney General Pam Bondi, Trump alleged his opponents are “guilty as hell” and complained “nothing is being done.” Trump said, “We can’t delay any longer, it’s killing our reputation and credibility. They impeached me twice, and indicted me (5 times!), OVER NOTHING. JUSTICE MUST BE SERVED, NOW!!!”Last year, James won a civil lawsuit against the president, alleging that Trump and his companies artificially inflated real estate values. An appeals court later overturned the staggering fine, which had grown to more than half a billion dollars with interest, but upheld the lower court’s finding that Trump committed fraud. Lindsey Halligan, U.S. Attorney for the Eastern District of Virginia, said in a statement Thursday, “No one is above the law. The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public’s trust.”The statement noted that James faces up to 30 years in prison per count if convicted. Her first court appearance is scheduled for Oct. 24.Halligan, who previously served as a White House aide and Trump’s personal lawyer, is also spearheading the indictment of former FBI Director James Comey. She was appointed to the job after the Trump administration removed Erik Siebert, the veteran prosecutor who had overseen both investigations for months and resisted pressure to file charges. On social media last month, Trump wrote, “I withdrew the Nomination of Erik Siebert as U.S. Attorney for the Eastern District of Virginia, when I was informed that he received the UNUSUALLY STRONG support of the two absolutely terrible, sleazebag Democrat Senators, from the Great State of Virginia. He didn’t quit, I fired him!”James specifically cited the shakeup as evidence that her prosecution is politically motivated. “His decision to fire a United States attorney who refused to bring charges against me and replaced them with someone who was blindly loyal, not to the law but to the president, is antithetical to the bedrock principles of our country,” James said. Keep watching for the latest from the Washington News Bureau:

    WASHINGTON —

    New York Attorney General Letitia James is the latest political foe of President Donald Trump to face federal charges.

    A federal grand jury indicted James on charges of bank fraud and making false statements to a financial institution. The indictment accuses her of intentionally misrepresenting an investment property in Norfolk, Virginia, as her secondary residence to obtain better mortgage terms.

    In a video statement on Thursday, James said the indictment is part of the president’s “desperate weaponization of our justice system.”

    “These charges are baseless. And the president’s own public statements make clear that his only goal is political retribution at any cost,” James said.

    Trump has publicly urged the Justice Department to prosecute James and other political opponents. In a Truth Social post last month that was directed at Attorney General Pam Bondi, Trump alleged his opponents are “guilty as hell” and complained “nothing is being done.”

    Trump said, “We can’t delay any longer, it’s killing our reputation and credibility. They impeached me twice, and indicted me (5 times!), OVER NOTHING. JUSTICE MUST BE SERVED, NOW!!!”

    Last year, James won a civil lawsuit against the president, alleging that Trump and his companies artificially inflated real estate values. An appeals court later overturned the staggering fine, which had grown to more than half a billion dollars with interest, but upheld the lower court’s finding that Trump committed fraud.

    Lindsey Halligan, U.S. Attorney for the Eastern District of Virginia, said in a statement Thursday, “No one is above the law. The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public’s trust.”

    The statement noted that James faces up to 30 years in prison per count if convicted. Her first court appearance is scheduled for Oct. 24.

    Halligan, who previously served as a White House aide and Trump’s personal lawyer, is also spearheading the indictment of former FBI Director James Comey. She was appointed to the job after the Trump administration removed Erik Siebert, the veteran prosecutor who had overseen both investigations for months and resisted pressure to file charges.

    On social media last month, Trump wrote, “I withdrew the Nomination of Erik Siebert as U.S. Attorney for the Eastern District of Virginia, when I was informed that he received the UNUSUALLY STRONG support of the two absolutely terrible, sleazebag Democrat Senators, from the Great State of Virginia. He didn’t quit, I fired him!”

    James specifically cited the shakeup as evidence that her prosecution is politically motivated.

    “His decision to fire a United States attorney who refused to bring charges against me and replaced them with someone who was blindly loyal, not to the law but to the president, is antithetical to the bedrock principles of our country,” James said.

    Keep watching for the latest from the Washington News Bureau:

    Source link

  • Letitia James, the New York attorney general who defeated Trump in court, indicted by Justice Department

    (CNN) — New York Attorney General Letitia James was indicted Thursday in Alexandria, Virginia, as President Donald Trump’s Justice Department continues to pursue charges against his political opponents.

    James has been under investigation since May over a 2023 mortgage she took out to buy a home in Norfolk, Virginia. Thursday’s indictment focused on a 2020 mortgage for a different property in Norfolk.

    The grand jury returned two felony charges: bank fraud and making false statements to a financial institution. James’ first court appearance is scheduled for October 24 in Norfolk.

    According to the indictment, James claimed on mortgage paperwork that a home she purchased in Norfolk would be her second residence. That claim allowed her to get favorable loan terms not available for investment properties, prosecutors say.

    But, prosecutors allege, James did not use the house and instead rented the property to a family of three. They allege she falsely stated in loan applications that the residence would be a secondary home when they allege James knew she would use it as an investment property.

    According to the indictment, James received a lower mortgage rate on the property as a secondary mortgage than she would have had it been treated as an investment property. Prosecutors allege James received improper gains of $18,933 over the life of the loan.

    The charges come as Trump continues to call for his enemies to be prosecuted in court. Former FBI Director James Comey pleaded not guilty Wednesday to allegedly making a false statement in a congressional proceeding. The Justice Department has also opened investigation into former Trump national security adviser John Bolton, California Democratic Sen. Adam Schiff, and others.

    “This is nothing more than a continuation of the president’s desperate weaponization of our justice system,” James said in a statement.

    “These charges are baseless, and the president’s own public statements make clear that his only goal is political retribution at any cost,” she added. “The president’s actions are a grave violation of our Constitutional order and have drawn sharp criticism from members of both parties.”

    James’ relationship with Trump has been adversarial for years as James campaigned on promises to investigate Trump and ultimately won a civil fraud case against Trump, his adult sons and his real estate business. A judge found them liable for fraud for inflating the value of their properties, and ordered Trump to pay $355 million in penalties.

    Attorney General Letitia James sits in the courtroom during the civil fraud trial of former U.S. President Donald Trump at New York Supreme Court in January 2024 in New York City. Credit: Seth Wenig/Pool / Getty Images/File via CNN Newsource

    A New York appeals court tossed the penalties and Trump has appealed the verdict.

    During the 11-week trial, Trump’s anger toward James was palpable. He railed against her in the courthouse hallways and from the witness stand. Trump testified as James sat across from him in the courtroom galley.

    “This is a political witch hunt and I think she should be ashamed of herself,” Trump testified. “You believe this political hack back there and that’s unfortunate.”

    James often punched back outside of the courtroom, on social media or in video statements.

    Last month CNN reported that Justice Department prosecutors in Virginia, led at the time by Erik Siebert, interviewed dozens of witnesses and did not believe they gathered enough evidence to support criminal charges against James.

    Under pressure by Trump to bring charges against Comey and James, Siebert resigned and was replaced as US attorney by Trump’s former personal attorney Lindsey Halligan.

    “No one is above the law. The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public’s trust,” Halligan said in a statement. “The facts and the law in this case are clear, and we will continue following them to ensure that justice is served.”

    Ed Martin, Trump’s Justice Department weaponization chief, posted on social media after the charges were announced: “Promises made, Promises kept.”

    Martin previously posed for photos outside of James’ Brooklyn home in August and called on her to resign in a letter to her attorney.

    Mortgage fraud investigation

    The investigation had focused on a mortgage obtained in 2023 for a property in Norfolk.

    Her attorneys provided a document to the Justice Department in April to push back on what they called “threadbare” allegations.

    They said that one document in the mortgage application “mistakenly” said the property would be James’ primary residence. But they submitted other documents to argue there was no fraud.

    In one document, James writes in an email to her loan originator, “this property WILL NOT be my primary residence.”

    That property in question, however, was unrelated to the underlying charges in the indictment, according to a source familiar.

    CNN’s Casey Gannon and Devan Cole contributed to this report.

    This story has been updated with additional reporting.

    Kristen Holmes, Hannah Rabinowitz, Kara Scannell and CNN

    Source link

  • US attorney under pressure to charge Letitia James in mortgage fraud case is resigning: AP sources

    A federal prosecutor in Virginia whose monthslong mortgage fraud investigation into New York Attorney General Letitia James has not resulted in criminal charges resigned Friday under pressure from the Trump administration.Erik Siebert confirmed his departure in an email to colleagues, reviewed by The Associated Press, in which he praised them as the “finest and most exceptional” of Justice Department employees but made no mention of the political turmoil that preceded his resignation.The replacement of Siebert as U.S. attorney for the prestigious Eastern District of Virginia office comes amid a push by Trump administration officials to indict James, a perceived adversary of the president who has successfully sued him for fraud. President Donald Trump told reporters in the Oval Office on Friday that he wanted Siebert “out” and multiple people familiar with the matter later told the AP that Siebert had informed his colleagues of his plan to resign from the position.The administration’s effort to oust him from the job represents a further erosion of norms meant to insulate the Justice Department from White House influence on prosecutorial decisions. The move is likely to deepen concerns that the department — already investigating other public figures Trump regards as foes — is being weaponized by a White House seeking to have its prosecutorial powers used for purposes of retribution.It was not immediately clear Friday afternoon who would replace Siebert, who was nominated by Trump to the top job in the office this year after having worked there for more than a decade. Siebert’s top deputy, Maya Song, is also leaving her position as first assistant U.S. attorney and will work as a line prosecutor, one of the people familiar with the matter said.Justice Department spokespeople declined to comment.Trump administration officials have been aggressively pursuing allegations against James arising from alleged paperwork discrepancies on her Brooklyn townhouse and a Virginia home. The Justice Department has spent months conducting the investigation but has yet to bring charges, and there’s been no indication that prosecutors have managed to uncover any degree of incriminating evidence that could support bringing an indictment.Asked about the issue at the White House Friday, Trump, without citing any evidence, said, “It looks to me like she’s really guilty of something, but I really don’t know.” Trump also said he was bothered that Siebert had been supported by the state’s two Democratic senators.James’ lawyers have vigorously denied any allegations and characterized the investigation as an act of political revenge.ABC News was first to report that Trump administration officials were pressuring prosecutors to bring charges and that the Republican administration was preparing to oust Siebert.James has long been a particular source of outrage for Trump, in part because of a lawsuit she filed against him and his company that resulted in a massive financial penalty last year. That penalty was thrown out last month by an appeals court that narrowly upheld a judge’s finding that Trump had engaged in fraud by exaggerating his wealth for decades.The case has taken a series of unorthodox turns. It emerged last month that Ed Martin, who leads the Justice Department’s Weaponization Working Group and is helping coordinate the investigation, had sent a letter urging James to resign from office “as an act of good faith” after starting his mortgage fraud investigation of her. He later turned up outside James’ Brooklyn townhouse in a “Columbo”-esque trench coat. A New York Post writer at the scene observed him tell a neighbor: “I’m just looking at houses, interesting houses. It’s an important house.”James’ lawyer, Abbe Lowell, told Martin in a letter that the request for James’ resignation defied Justice Department standards and codes of professional responsibility and legal ethics.The Justice Department “has firm policies against using investigations and against using prosecutorial power for achieving political ends,” Lowell wrote. “This is ever more the case when that demand is made to seek political revenge against a public official in the opposite party.”A former District of Columbia police officer, Siebert joined the Eastern District of Virginia, an elite Justice Department prosecution office with a history of sophisticated national security and criminal cases, in 2010. He was nominated to the role of U.S. attorney by Trump this year with the backing of the state’s two Democratic senators, Mark Warner and Tim Kaine.The office has separately been involved in investigating matters related to the years-old investigation into potential ties between Russia and Trump’s 2016 presidential campaign, a longstanding grievance of the president. No charges have been announced as part of that work.Although U.S. attorneys are presidential appointees, they are rarely fired. But the Trump administration has repeatedly disregarded norms and traditions meant to protect Justice Department prosecutors from White House political influence.Prosecutors and other support personnel who worked on the special counsel team of Jack Smith that investigated and prosecuted Trump have been fired, as was Maurene Comey, a federal prosecutor in New York whose father, former FBI Director James Comey, was terminated by Trump months into his first term amid the Russia election interference investigation.Martin’s investigation stems from a letter Federal Housing Finance Agency Director William Pulte sent to Attorney General Pam Bondi in April asking her to investigate and consider prosecuting James, alleging she had “falsified bank documents and property records.”Pulte, whose agency regulates mortgage financiers Fannie Mae and Freddie Mac, cited “media reports” claiming James had falsely listed a Virginia home as her principal residence, and he suggested she may have been trying to avoid higher interest rates that often apply to second homes.Records show James was listed as a co-borrower on a house her niece was buying in 2023. Lowell said records and correspondence easily disproved Pulte’s allegation. While James signed a power-of-attorney form that, Lowell said, “mistakenly stated the property to be Ms. James’ principal residence,” she sent an email to her mortgage loan broker around the same time that made clear the property “WILL NOT be my primary residence.”____ Associated Press writer Michael R. Sisak in New York contributed to this report.

    WASHINGTON —

    A federal prosecutor in Virginia whose monthslong mortgage fraud investigation into New York Attorney General Letitia James has not resulted in criminal charges resigned Friday under pressure from the Trump administration.

    Erik Siebert confirmed his departure in an email to colleagues, reviewed by The Associated Press, in which he praised them as the “finest and most exceptional” of Justice Department employees but made no mention of the political turmoil that preceded his resignation.

    The replacement of Siebert as U.S. attorney for the prestigious Eastern District of Virginia office comes amid a push by Trump administration officials to indict James, a perceived adversary of the president who has successfully sued him for fraud. President Donald Trump told reporters in the Oval Office on Friday that he wanted Siebert “out” and multiple people familiar with the matter later told the AP that Siebert had informed his colleagues of his plan to resign from the position.

    The administration’s effort to oust him from the job represents a further erosion of norms meant to insulate the Justice Department from White House influence on prosecutorial decisions. The move is likely to deepen concerns that the department — already investigating other public figures Trump regards as foes — is being weaponized by a White House seeking to have its prosecutorial powers used for purposes of retribution.

    It was not immediately clear Friday afternoon who would replace Siebert, who was nominated by Trump to the top job in the office this year after having worked there for more than a decade. Siebert’s top deputy, Maya Song, is also leaving her position as first assistant U.S. attorney and will work as a line prosecutor, one of the people familiar with the matter said.

    Justice Department spokespeople declined to comment.

    Trump administration officials have been aggressively pursuing allegations against James arising from alleged paperwork discrepancies on her Brooklyn townhouse and a Virginia home. The Justice Department has spent months conducting the investigation but has yet to bring charges, and there’s been no indication that prosecutors have managed to uncover any degree of incriminating evidence that could support bringing an indictment.

    Asked about the issue at the White House Friday, Trump, without citing any evidence, said, “It looks to me like she’s really guilty of something, but I really don’t know.” Trump also said he was bothered that Siebert had been supported by the state’s two Democratic senators.

    James’ lawyers have vigorously denied any allegations and characterized the investigation as an act of political revenge.

    ABC News was first to report that Trump administration officials were pressuring prosecutors to bring charges and that the Republican administration was preparing to oust Siebert.

    James has long been a particular source of outrage for Trump, in part because of a lawsuit she filed against him and his company that resulted in a massive financial penalty last year. That penalty was thrown out last month by an appeals court that narrowly upheld a judge’s finding that Trump had engaged in fraud by exaggerating his wealth for decades.

    The case has taken a series of unorthodox turns. It emerged last month that Ed Martin, who leads the Justice Department’s Weaponization Working Group and is helping coordinate the investigation, had sent a letter urging James to resign from office “as an act of good faith” after starting his mortgage fraud investigation of her. He later turned up outside James’ Brooklyn townhouse in a “Columbo”-esque trench coat. A New York Post writer at the scene observed him tell a neighbor: “I’m just looking at houses, interesting houses. It’s an important house.”

    James’ lawyer, Abbe Lowell, told Martin in a letter that the request for James’ resignation defied Justice Department standards and codes of professional responsibility and legal ethics.

    The Justice Department “has firm policies against using investigations and against using prosecutorial power for achieving political ends,” Lowell wrote. “This is ever more the case when that demand is made to seek political revenge against a public official in the opposite party.”

    A former District of Columbia police officer, Siebert joined the Eastern District of Virginia, an elite Justice Department prosecution office with a history of sophisticated national security and criminal cases, in 2010. He was nominated to the role of U.S. attorney by Trump this year with the backing of the state’s two Democratic senators, Mark Warner and Tim Kaine.

    The office has separately been involved in investigating matters related to the years-old investigation into potential ties between Russia and Trump’s 2016 presidential campaign, a longstanding grievance of the president. No charges have been announced as part of that work.

    Although U.S. attorneys are presidential appointees, they are rarely fired. But the Trump administration has repeatedly disregarded norms and traditions meant to protect Justice Department prosecutors from White House political influence.

    Prosecutors and other support personnel who worked on the special counsel team of Jack Smith that investigated and prosecuted Trump have been fired, as was Maurene Comey, a federal prosecutor in New York whose father, former FBI Director James Comey, was terminated by Trump months into his first term amid the Russia election interference investigation.

    Martin’s investigation stems from a letter Federal Housing Finance Agency Director William Pulte sent to Attorney General Pam Bondi in April asking her to investigate and consider prosecuting James, alleging she had “falsified bank documents and property records.”

    Pulte, whose agency regulates mortgage financiers Fannie Mae and Freddie Mac, cited “media reports” claiming James had falsely listed a Virginia home as her principal residence, and he suggested she may have been trying to avoid higher interest rates that often apply to second homes.

    Records show James was listed as a co-borrower on a house her niece was buying in 2023. Lowell said records and correspondence easily disproved Pulte’s allegation. While James signed a power-of-attorney form that, Lowell said, “mistakenly stated the property to be Ms. James’ principal residence,” she sent an email to her mortgage loan broker around the same time that made clear the property “WILL NOT be my primary residence.”

    ____

    Associated Press writer Michael R. Sisak in New York contributed to this report.

    Source link

  • Appeals court rejects Trump’s bid to fire Fed Governor Lisa Cook

    (CNN) — President Donald Trump cannot remove Lisa Cook from the Federal Reserve’s Board of Governors for now, a federal appeals court said in an emergency ruling Monday, just hours before the central bank’s two-day monetary policy meeting was set to kick off.

    The decision from the US Court of Appeals for the District of Columbia Circuit, split 2-1 along party lines, marks another defeat for the White House’s efforts to control the Fed and economic policy. Trump has sought to oust Cook over allegations of mortgage fraud, though Cook has not been charged with any wrongdoing.

    The Federal Reserve Act specifies that presidents can only fire Fed governors “for cause,” and Trump has sought to leverage allegations of mortgage fraud as a sufficient cause for firing.

    “In this court, the government does not dispute that it failed to provide Cook even minimal process—that is, notice of the allegation against her and a meaningful opportunity to respond—before she was purportedly removed,” Judges Bradley Garcia and Michelle Childs wrote in their opinion.

    “The district court issued its preliminary injunction after finding that Cook is likely to succeed on two of her claims: her substantive, statutory claim that she was removed without ‘cause’… and her procedural claim that she did not receive sufficient process prior to her removal in violation of the Due Process Clause of the Fifth Amendment,” Garcia and Childs wrote.

    In his dissenting opinion, Judge Gregory Katsas wrote that “President Trump removed Cook for cause.”

    Cook’s attorneys did not respond to CNN’s request for comment following the ruling.

    White House spokesperson Kush Desai told CNN in a statement on Tuesday: “The President lawfully removed Lisa Cook for cause. The Administration will appeal this decision and looks forward to ultimate victory on the issue.”

    The court’s decision comes just weeks after Trump said he fired Cook, who responded by suing Trump based on “an unsubstantiated allegation” and that her firing violated her due process rights. If Trump is ultimately successful in removing Cook, it would mark the first time a Fed governor was fired by a president in the central bank’s 111-year history.

    At the same time the court ruled Trump couldn’t immediately fire Cook, Stephen Miran, Trump’s nominee to fill a separate seat on Fed’s Board, was confirmed by the Senate.

    Trump’s push to get the Fed to lower rates

    The Fed is widely expected to lower interest rates at the conclusion of their two-day policy meeting this week. However, it’s an open question how big the cut will be at this and upcoming meetings.

    Meanwhile, Trump’s push to oust Cook, a Biden appointee and the first Black woman to serve on the Fed’s Board, comes amid a campaign to get the central bank to lower interest rates.

    As part of that effort, Trump has tried unsuccessfully to bully Fed Chair Jerome Powell into lowering rates, calling him a “numbskull,” a “major loser” and “a very stupid person” for keeping rates elevated. He also threatened to fire him, but more recently has said he’d allow Powell to stay on until his term as chair ends in May.

    While seven out of 12 members of the Fed’s interest rate-setting committee are nominated by the president and confirmed by members of the Senate, the central bank for decades has functioned as an independent institution.

    Trump’s attempt to fire Cook raises serious concerns about the degree of independence the Fed will have moving forward.

    “President Trump’s attempted removal of Governor Lisa Cook, if allowed, would mark an immediate end to that history,” Cook’s attorneys wrote in a filing on Saturday. Economists have expressed similar concerns, arguing that the US economy’s success has been predicated on having an independent central bank, which helps instill confidence in domestic and foreign investors.

    The Fed was designed to be independent from politicians specifically so it could focus on economic data – and not political considerations – in achieving its dual mandate to keep price increases in check while supporting the job market.

    Politicians often prefer lower interest rates, aiming to boost stock prices and make it cheaper for people to borrow money, both popular moves among voters. But lower interest rates risk igniting price pressures. On the other hand, leaving rates too high could overly restrict spending and hiring, hurting the economy.

    Cook and her attorneys have argued that Trump’s use of “cause” is an attempt to get around a Supreme Court decision from earlier this year that appeared to limit the president’s ability to remove Federal Reserve governors.

    Trump, Cook argued in court papers, wants to redefine the meaning of “cause” in a way that would allow him to fire any board member “with whom he disagrees about policy based on chalked up allegations.”

    “President Trump does not have the power to unilaterally redefine ‘cause’ – completely unmoored to caselaw, history, and tradition – and conclude, without evidence, that he has found it,” Cook’s attorneys wrote.

    The Trump administration called Cook’s claims to stay on the board “meritless,” adding that concerns over whether Cook misrepresented her finances pose concerns as to “whether Cook can be trusted to act with forthrightness, care, and disinterest in managing the U.S. money supply.”

    This story has been updated with additional context and developments.

    Bryan Mena, Dan Berman and CNN

    Source link

  • Trump administration moves forward with push to fire Fed governor Lisa Cook

    (CNN) — The Trump administration on Sunday renewed its request to a federal appeals court to fire Lisa Cook, a Federal Reserve governor who has faced political scrutiny in recent weeks.

    The move comes ahead of the independent central bank’s vote on interest rates this week. President Donald Trump has repeatedly called for the Fed to slash interest rates while publicly targeting Fed chair Jerome Powell.

    The Trump administration filed its request to the US Court of Appeals for the District of Columbia ahead of Sunday’s 3 p.m. ET deadline.

    The Trump administration called Cook’s claims to stay on the board “meritless,” adding that concerns over whether Cook misrepresented her finances pose concerns as to “whether Cook can be trusted to act with forthrightness, care, and disinterest in managing the U.S. money supply.”

    Lowell & Associates, which is representing Cook, did not respond to CNN’s request for comment

    On Saturday, Cook’s legal team requested that the court reject Trump’s bid to remove her from the board because the administration did not show sufficient cause to fire her. Cook’s lawyers also argued that allowing her to be fired threatens the bank’s independence and the nation’s economic stability.

    “As economists have warned, everyday Americans ultimately would pay the price: higher prices ‘via higher inflation and higher interest rates’ that result ‘when central bank independence is lost,’” Cook’s lawyers said.

    Cook has been under fire for accusations of mortgage fraud, which were launched by Federal Housing Finance Agency Director Bill Pulte. Trump said on August 25 that he would remove Cook from her position because of the accusation.

    Auzinea Bacon and CNN

    Source link

  • Trump official lodges new criminal referral against Fed Governor Lisa Cook

    (CNN) — A Trump administration housing official has sent a new criminal referral to the Justice Department against Federal Reserve Governor Lisa Cook, as she sues the administration to fight the president’s efforts to fire her.

    The new criminal referral, made late Thursday and revealed in a social media post by Federal Housing Finance Agency director Bill Pulte, alleges Cook identified a property in Cambridge, Massachusetts, as a second home on official documents, but instead used it as an investment property.

    Cook, the first Black woman to serve as a Fed governor, has filed a lawsuit challenging President Donald Trump’s firing of her earlier this week. A hearing on that suit took place Friday morning.

    The battle over Cook’s job is about more than one position: The nation’s central bank operates independently so that officials can make economic decisions without pressure over political considerations. Trump’s attempts to fire Cook – and to force the bank to cut interest rates – get to the heart of the question about the Fed’s independence and whether Trump’s presidential powers have limits.

    The Fed has been resistant to cutting rates this year, citing Trump’s tariffs and their potential to raise inflation. Trump, however, has repeatedly demanded lower borrowing costs, often lobbing personal insults in the process.

    Cook has not been charged with any crimes.

    At the Friday hearing on her civil suit, her attorney, Abbe Lowell argued the mortgage fraud allegations are a pretext because of Trump’s political ire with the Fed for not lowering interest rates.

    In a statement to CNN, Lowell denied there was any validity to the allegations against his client.

    “This is an obvious smear campaign aimed at discrediting Gov. Cook by a political operative who has taken to social media more than 30 times in the last two days and demanded her removal before any review of the facts or evidence,” Lowell said in the statement. “Nothing in these vague, unsubstantiated allegations has any relevance to Gov. Cook’s role at the Federal Reserve, and they in no way justify her removal from the board.”

    In court Friday in Cook’s civil case, the Justice Department didn’t acknowledge any criminal investigation it may be conducting.

    But lawyers for the department have argued to a judge weighing the legality of her firing that “a Governor’s failure to carefully read her own financial documents casts a shadow over the Federal Reserve’s decisions,” according to a Justice Department court filing this week.

    Still, the Justice Department has tasked Ed Martin—whom the attorney general is using as a special investigator for a smattering of politically charged allegations that President Donald Trump is interested in—to look into the allegations around Cook, according to a person familiar with the investigation.

    Many of Trump’s attacks on the Fed have been focused on Fed Chair Jerome Powell, whom he appointed during his first term in office, and who was reappointed to another term under President Joe Biden.

    Trump has not tried to remove Powell, despite threats that he might do so. Some of those threats prompted a sell-off in US equity markets by investors concerned about Fed independence. The president does not have the power to remove a member of the Fed Board except “for cause,” not just because of a disagreement over monetary policy. But Trump used the allegations of mortgage fraud against Cook as justification for her removal.

    In the Thursday referral to the DOJ, Pulte described the new allegations as “extremely troubling.”

    “Second homes receive lower mortgage costs than investment properties, because investment properties are inherently riskier,” he wrote.

    The FHFA had already made a criminal referral alleging that Cook committed mortgage fraud by getting mortgages for two different properties, one in Michigan, another in Georgia, and claiming on both mortgages that they would be her primary residence.

    This story has been updated with additional reporting and context.

    – CNN’s Jeremy Herb, Phil Mattingly and Evan Perez contributed to this report.

    Chris Isidore and CNN

    Source link

  • A Trump donor, now a regulator, leads effort to accuse president’s foes of mortgage fraud

    WASHINGTON — Behind a White House effort to saddle President Trump’s political foes with accusations of mortgage fraud is a 37-year-old home construction executive with a deep partisan past.

    Bill Pulte, a Florida native, rose in Trump’s orbit toward the end of his first term. After courting Trump for years on social media and through generous donations, he now runs the Federal Housing Finance Agency — a perch that has allowed him to target prominent figures who have crossed the president.

    In the last five months, Pulte has referred three claims of mortgage fraud against Trump’s foes to the Justice Department, leveled against Letitia James, the attorney general of New York; Adam Schiff, the Democratic senator from California; and this week, Lisa Cook, a governor on the board of the Federal Reserve.

    Each has denied wrongdoing. Trump announced on Monday night that he was moving to fire Cook.

    It is an unusual role for a director of the FHFA, which regulates Fannie Mae — the nation’s largest company by assets — and Freddie Mac. The two mortgage financing organizations, which support nearly half of the U.S. residential mortgage market, were taken over by the FHFA during the 2008 economic crisis.

    The grandson of one of Michigan’s wealthiest and most prolific homebuilders, Pulte made a name for himself on Twitter in 2019 with public cash giveaways to individuals in need. He dubbed himself the “inventor of Twitter philanthropy,” vowing to give two cars away in exchange for a Trump retweet that year, which he received. He subsequently built a following of over 3 million.

    Records show Pulte donated substantially to Trump, the Republican National Committee and related super PACs leading up to the 2024 election.

    Pulte’s letters to Atty. Gen. Pam Bondi have been tightly and cautiously written. But his social media posts, celebrating the targeted attacks, have not.

    “Trump becomes the first president ever to remove a sitting Federal Reserve governor,” he wrote on X, between retweets of right-wing commentators praising the move. “Mortgage fraud can carry up to 30 years in prison.”

    In another post on X, quoting a CNN headline, Pulte wrote that Trump’s firing of Cook was “escalating his battle against the central bank” — seeming to acknowledge that targeting Cook was motivated by Trump’s ongoing grievances with Fed leadership.

    Cook’s firing is legally dubious, and her attorney, Abbe Lowell, said in a statement that Cook plans on suing the administration while continuing to perform her duties for the Fed. Lowell also represents James in her defense against the Justice Department case.

    While the Supreme Court ruled in May that Trump may fire individuals from independent federal agencies, the justices singled out the Fed as an exception, calling it a “uniquely structured, quasi-private entity.” The Federal Reserve Act of 1913 states that the president may fire a member of its leadership only “for cause.”

    But cause has not been definitively established to fire Cook, with Pulte writing in his letter to Bondi that the Fed governor had only “potentially” committed mortgage fraud, accusing her of falsifying bank documents and property records to acquire more favorable loan terms.

    Pulte has accused Cook of listing two homes — in Ann Arbor, Mich., and in Atlanta — as her primary addresses within two weeks of purchasing them through financing. Cook said she would “take any questions about my financial history seriously” and was “gathering the accurate information to answer any legitimate questions and provide the facts.”

    Pulte’s other accusations, against James and Schiff, have been similarly superficial, publicly accusing individuals of potential criminality before a full, independent investigation can take place.

    And whether those investigations will be impartial is far from clear. Earlier this month, Bondi appointed Ed Martin, a conspiracy theorist who supported the “Stop the Steal” movement after Joe Biden’s election victory over Trump in 2020, as a special prosecutor to investigate the James and Schiff cases.

    Pulte accused James — who successfully accused Trump of financial fraud in a civil suit last year — of falsifying bank statements and property records to secure more favorable loan terms for homes in Virginia and New York. He made similar claims weeks later about Schiff, who maintains residences in California and the suburbs of Washington, D.C.

    Schiff, who led a House impeachment of Trump during the president’s first term and has remained one of his most vocal and forceful political adversaries since joining the Senate, dismissed the president’s claims as a “baseless attempt at political retribution.”

    A spokesperson for Schiff said he has always been transparent about owning two homes, in part to be able to raise his children near him in Washington, and has always followed the law — and advice from House counsel — in arranging his mortgages.

    In making his claims, Trump cited an investigation by the Fannie Mae “Financial Crimes Division” as his source.

    A memorandum reviewed by The Times from Fannie Mae investigators to Pulte does not accuse Schiff of mortgage fraud. It noted that investigators had been asked by the FHFA inspector general’s office for loan files and “any related investigative or quality control documentation” for Schiff’s homes.

    Investigators said they found that Schiff at various points identified both his home in Potomac, Md., and a Burbank unit he also owns as his primary residence. As a result, they concluded that Schiff and his wife, Eve, “engaged in a sustained pattern of possible occupancy misrepresentation” on their home loans between 2009 and 2020.

    The investigators did not say they had concluded that a crime had been committed, nor did they mention the word “fraud” in the memo.

    Michael Wilner

    Source link

  • Garden City lawyer sentenced in $6M real estate fraud scheme | Long Island Business News

    THE BLUEPRINT:

    • Defendant sentenced to four to 12 years

    • Victims include homeowners, lenders and real estate agents

    • Ordered to repay $6.2M in civil judgment to 52 victims

    An attorney from Garden City was sentenced Tuesday in a $6 million attorney embezzlement and real estate fraud scheme, officials said.

    Daniel Boldi had pleaded guilty in October of 2024 to 13 counts of second-degree grand larceny and one first-degree scheme to defraud, in connection to more than 50 real estate transactions between September 2020 and January 2024, according to Nassau County District Attorney Anne Donnelly.

    He was sentenced to four to 12 years in prison. In addition, in a civil judgment, the defendant was ordered to pay more than $6.2 million to 52 victims to compensate them for what they lost.

    “Daniel Boldi’s clients trusted him to safeguard their money during the homebuying process, but he ultimately betrayed them with his greed,” Donnelly said.

    “The ripple effects of his theft are devastating, leaving victims in a financial hole of more than $6 million,” Donnelly added. “My office won’t allow the people of Nassau County to be cheated by predatory criminals who pose as upstanding professionals. When someone abuses their power like this, we will expose them.”

    Officials allege that between Sept. 8, 2020, and Jan. 17, 2024, Boldi, who owned Boldi Law Group embezzled the money from victims, ranging from individual homeowners, real estate agents, lenders and other entities for whom he held money in escrow. Boldi committed escrow thefts totaling more than $4.7 million from victims, according to the DA.

    In one instance, on Oct. 31, 2023, a couple retained Boldi to close the sale of their East Meadow home, with Boldi acting as the settlement agent, officials said. He was responsible for sending $309,367 from the buyer’s mortgage lender to pay off the couple’s mortgage.

    Instead, officials said, Boldi falsely claimed the funds hadn’t been posted to his escrow account, prompting a “dry closing” with the deed held in escrow. On Nov. 2, he gave the couple a fake wire transfer confirmation as proof of payment, leading to the release of the deed and completion of the sale. However, the funds were never sent, and the couple remained responsible for mortgage payments on a home they no longer owned, the DA”s office said.

    In another instance, officials said that Boldi provided a private lender with a fraudulent mortgage and title closing records, embezzling $1.15 million through two separate loan thefts between Sept. 8, 2020, and Nov. 7, 2023. Bank records show he spent those funds on personal expenses, including Venmo payments and property investments.

     

     


    Adina Genn

    Source link

  • Trump fires Fed governor Lisa Cook, opening new front in fight for control over central bank

    President Donald Trump said Monday night that he’s firing Federal Reserve Governor Lisa Cook, an unprecedented move that would constitute a sharp escalation in his battle to exert greater control over what has long been considered an institution independent from day-to-day politics.Trump said in a letter posted on his Truth Social platform that he is removing Cook effective immediately because of allegations that she committed mortgage fraud.Cook said Monday night that she would not step down. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said in an emailed statement. “I will not resign.”Bill Pulte, a Trump appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, made the accusations last week. Pulte alleged that Cook had claimed two primary residences — in Ann Arbor, Michigan, and Atlanta — in 2021 to get better mortgage terms. Mortgage rates are often higher on second homes or those purchased to rent.Trump’s move is likely to touch off an extensive legal battle that will probably go to the Supreme Court and could disrupt financial markets. Stock futures declined slightly late Monday, as did the dollar against other major currencies.If Trump succeeds in removing Cook from the board, it could erode the Fed’s political independence, which is considered critical to its ability to fight inflation because it enables it to take unpopular steps like raising interest rates. If bond investors start to lose faith that the Fed will be able to control inflation, they will demand higher rates to own bonds, pushing up borrowing costs for mortgages, car loans and business loans.Cook has retained Abbe Lowell, a prominent Washington attorney. Lowell said Trump’s “reflex to bully is flawed and his demands lack any proper process, basis or legal authority,” adding, “We will take whatever actions are needed to prevent his attempted illegal action.”Cook was appointed to the Fed’s board by then-President Joe Biden in 2022 and is the first Black woman to serve as a governor. She was a Marshall Scholar and received degrees from Oxford University and Spelman College, and she has taught at Michigan State University and Harvard University’s Kennedy School of Government.Her nomination was opposed by most Senate Republicans, and she was approved on a 50-50 vote with the tie broken by then-Vice President Kamala Harris.Questions about ‘for cause’ firingThe law allows a president to fire a Fed governor “for cause,” which typically means for some kind of wrongdoing or dereliction of duty. The president cannot fire a governor simply because of differences over interest rate policy.Establishing a for-cause removal typically requires some type of proceeding that would allow Cook to answer the charges and present evidence, legal experts say, which hasn’t happened in this case.”This is a procedurally invalid removal under the statute,” said Lev Menand, a law professor at Columbia law school and author of “The Fed Unbound,” a book about the Fed’s actions during the COVID-19 pandemic.Menand also said for-cause firings are typically related to misconduct while in office, rather than based on private misconduct from before an official’s appointment.”This is not someone convicted of a crime,” Menand said. “This is not someone who is not carrying out their duties.”Fed governors vote on the central bank’s interest rate decisions and on issues of financial regulation. While they are appointed by the president and confirmed by the Senate, they are not like cabinet secretaries, who serve at the pleasure of the president. They serve 14-year terms that are staggered in an effort to insulate the Fed from political influence.No presidential precedentWhile presidents have clashed with Fed chairs before, no president has sought to fire a Fed governor. In recent decades, presidents of both parties have largely respected Fed independence, though Richard Nixon and Lyndon Johnson put heavy pressure on the Fed during their presidencies — mostly behind closed doors. Still, that behind-the-scenes pressure to keep interest rates low, the same goal sought by Trump, has widely been blamed for touching off rampant inflation in the late 1960s and ’70s.President Harry Truman pushed Thomas McCabe to step down from his position as Fed chair in 1951, though that occurred behind the scenes.The Supreme Court signaled in a recent decision that Fed officials have greater legal protections from firing than other independent agencies, but it’s not clear if that extends to this case.Menand noted that the Court’s conservative majority has taken a very expansive view of presidential power, saying, “We’re in uncharted waters in a sense that it’s very difficult to predict that if Lisa Cook goes to court what will happen.”Sarah Binder, a senior fellow at the Brookings Institution, said the president’s use of the “for cause” provision is likely an effort to mask his true intent. “It seems like a fig leaf to get what we wants, which is muscling someone on the board to lower rates,” she said.A fight over interest ratesTrump has said he would only appoint Fed officials who would support lower borrowing costs. He recently named Stephen Miran, a top White House economic adviser, to replace another governor, Adriana Kugler, who stepped down about five months before her term officially ended Aug. 1.Trump appointed two governors in his first term, Christopher Waller and Michelle Bowman, so replacing Cook would give Trump appointees a 4-3 majority on the Fed’s board.”The American people must have the full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” Trump wrote in a letter addressed to Cook, a copy of which he posted online. “In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”Trump argued that firing Cook was constitutional. “I have determined that faithfully enacting the law requires your immediate removal from office,” the president wrote.Cook will have to fight the legal battle herself, as the injured party, rather than the Fed.Trump’s announcement drew swift rebuke from advocates and former Fed officials.Sen. Elizabeth Warren, D-Mass., called Trump’s attempt to fire Cook illegal, “the latest example of a desperate President searching for a scapegoat to cover for his own failure to lower costs for Americans. It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court.”Trump has repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting its short-term interest rate, and even threatened to fire him.Forcing Cook off the Fed’s governing board would provide Trump an opportunity to appoint a loyalist. Trump has said he would only appoint officials who would support cutting rates.Powell signaled last week that the Fed may cut rates soon even as inflation risks remain moderate. Meanwhile, Trump will be able to replace Powell in May 2026, when Powell’s term expires. However, 12 members of the Fed’s interest-rate setting committee have a vote on whether to raise or lower interest rates, so even replacing the chair might not guarantee that Fed policy will shift the way Trump wants.__Associated Press writer Fatima Hussein contributed.

    President Donald Trump said Monday night that he’s firing Federal Reserve Governor Lisa Cook, an unprecedented move that would constitute a sharp escalation in his battle to exert greater control over what has long been considered an institution independent from day-to-day politics.

    Trump said in a letter posted on his Truth Social platform that he is removing Cook effective immediately because of allegations that she committed mortgage fraud.

    Cook said Monday night that she would not step down. “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” she said in an emailed statement. “I will not resign.”

    Bill Pulte, a Trump appointee to the agency that regulates mortgage giants Fannie Mae and Freddie Mac, made the accusations last week. Pulte alleged that Cook had claimed two primary residences — in Ann Arbor, Michigan, and Atlanta — in 2021 to get better mortgage terms. Mortgage rates are often higher on second homes or those purchased to rent.

    Trump’s move is likely to touch off an extensive legal battle that will probably go to the Supreme Court and could disrupt financial markets. Stock futures declined slightly late Monday, as did the dollar against other major currencies.

    If Trump succeeds in removing Cook from the board, it could erode the Fed’s political independence, which is considered critical to its ability to fight inflation because it enables it to take unpopular steps like raising interest rates. If bond investors start to lose faith that the Fed will be able to control inflation, they will demand higher rates to own bonds, pushing up borrowing costs for mortgages, car loans and business loans.

    Cook has retained Abbe Lowell, a prominent Washington attorney. Lowell said Trump’s “reflex to bully is flawed and his demands lack any proper process, basis or legal authority,” adding, “We will take whatever actions are needed to prevent his attempted illegal action.”

    Cook was appointed to the Fed’s board by then-President Joe Biden in 2022 and is the first Black woman to serve as a governor. She was a Marshall Scholar and received degrees from Oxford University and Spelman College, and she has taught at Michigan State University and Harvard University’s Kennedy School of Government.

    Her nomination was opposed by most Senate Republicans, and she was approved on a 50-50 vote with the tie broken by then-Vice President Kamala Harris.

    Questions about ‘for cause’ firing

    The law allows a president to fire a Fed governor “for cause,” which typically means for some kind of wrongdoing or dereliction of duty. The president cannot fire a governor simply because of differences over interest rate policy.

    Establishing a for-cause removal typically requires some type of proceeding that would allow Cook to answer the charges and present evidence, legal experts say, which hasn’t happened in this case.

    “This is a procedurally invalid removal under the statute,” said Lev Menand, a law professor at Columbia law school and author of “The Fed Unbound,” a book about the Fed’s actions during the COVID-19 pandemic.

    Menand also said for-cause firings are typically related to misconduct while in office, rather than based on private misconduct from before an official’s appointment.

    “This is not someone convicted of a crime,” Menand said. “This is not someone who is not carrying out their duties.”

    Fed governors vote on the central bank’s interest rate decisions and on issues of financial regulation. While they are appointed by the president and confirmed by the Senate, they are not like cabinet secretaries, who serve at the pleasure of the president. They serve 14-year terms that are staggered in an effort to insulate the Fed from political influence.

    No presidential precedent

    While presidents have clashed with Fed chairs before, no president has sought to fire a Fed governor. In recent decades, presidents of both parties have largely respected Fed independence, though Richard Nixon and Lyndon Johnson put heavy pressure on the Fed during their presidencies — mostly behind closed doors. Still, that behind-the-scenes pressure to keep interest rates low, the same goal sought by Trump, has widely been blamed for touching off rampant inflation in the late 1960s and ’70s.

    President Harry Truman pushed Thomas McCabe to step down from his position as Fed chair in 1951, though that occurred behind the scenes.

    The Supreme Court signaled in a recent decision that Fed officials have greater legal protections from firing than other independent agencies, but it’s not clear if that extends to this case.

    Menand noted that the Court’s conservative majority has taken a very expansive view of presidential power, saying, “We’re in uncharted waters in a sense that it’s very difficult to predict that if Lisa Cook goes to court what will happen.”

    Sarah Binder, a senior fellow at the Brookings Institution, said the president’s use of the “for cause” provision is likely an effort to mask his true intent. “It seems like a fig leaf to get what we wants, which is muscling someone on the board to lower rates,” she said.

    A fight over interest rates

    Trump has said he would only appoint Fed officials who would support lower borrowing costs. He recently named Stephen Miran, a top White House economic adviser, to replace another governor, Adriana Kugler, who stepped down about five months before her term officially ended Aug. 1.

    Trump appointed two governors in his first term, Christopher Waller and Michelle Bowman, so replacing Cook would give Trump appointees a 4-3 majority on the Fed’s board.

    “The American people must have the full confidence in the honesty of the members entrusted with setting policy and overseeing the Federal Reserve,” Trump wrote in a letter addressed to Cook, a copy of which he posted online. “In light of your deceitful and potentially criminal conduct in a financial matter, they cannot and I do not have such confidence in your integrity.”

    Trump argued that firing Cook was constitutional. “I have determined that faithfully enacting the law requires your immediate removal from office,” the president wrote.

    Cook will have to fight the legal battle herself, as the injured party, rather than the Fed.

    Trump’s announcement drew swift rebuke from advocates and former Fed officials.

    Sen. Elizabeth Warren, D-Mass., called Trump’s attempt to fire Cook illegal, “the latest example of a desperate President searching for a scapegoat to cover for his own failure to lower costs for Americans. It’s an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court.”

    Trump has repeatedly attacked the Fed’s chair, Jerome Powell, for not cutting its short-term interest rate, and even threatened to fire him.

    Forcing Cook off the Fed’s governing board would provide Trump an opportunity to appoint a loyalist. Trump has said he would only appoint officials who would support cutting rates.

    Powell signaled last week that the Fed may cut rates soon even as inflation risks remain moderate. Meanwhile, Trump will be able to replace Powell in May 2026, when Powell’s term expires. However, 12 members of the Fed’s interest-rate setting committee have a vote on whether to raise or lower interest rates, so even replacing the chair might not guarantee that Fed policy will shift the way Trump wants.

    __

    Associated Press writer Fatima Hussein contributed.

    Source link

  • Trump says he has fired Fed governor Lisa Cook. She says he has no ‘authority’ to fire her

    (CNN) — President Donald Trump on Monday said he has fired Federal Reserve Governor Lisa Cook, according to a letter addressed to her posted on his social media — the first instance of a president firing a central bank governor in the central bank’s 111-year history.

    The unprecedented move represents a significant escalation of the president’s battle against the Fed, which he has blamed for taking too long to lower interest rates. But Cook said the president doesn’t have the “authority” to fire her and that she plans to continue in her post.

    Cook has recently come under fire by Trump and members of his administration for allegedly committing mortgage fraud. The Justice Department has said it plans to investigate those allegations first raised by Federal Housing Finance Director Bill Pulte.

    Cook has not been charged with any wrongdoing.

    “President Trump purported to fire me ‘for cause’ when no cause exists under the law, and he has no authority to do so,” Cook said in statement her attorneys shared with CNN Monday night. “I will not resign. I will continue to carry out my duties to help the American economy as I have been doing since 2022.”

    The Fed declined to comment on the news.

    It’s unclear whether Trump has the legal authority to fire Cook over these allegations. The law specifies that a president may only remove members of the Fed’s board “for cause” – though what merits a for-cause firing has not been explicitly defined.

    Trump, in his letter to Cook wrote, “I have determined that there is sufficient cause to remove you from your position.”

    (A CNN review of mortgage documents shows that Cook took out mortgages for two properties, both of which were listed as her principal residence. However, it’s not known why she did so or if she did so intentionally.)

    “In light of your deceitful and potentially criminal conduct in a financial matter … I do not have such confidence in your integrity. At a minimum, the conduct at issue exhibits the sort of gross negligence in financial transactions that calls into question your competence and trustworthiness as a financial regulator,” Trump added in his letter.

    “This is not DOJ opening anything, they haven’t charged her. So as of right now, I think it’s kind of questionable for cause,” former Federal prosecutor Shan Wu told CNN’s Brianna Keilar, referring to the Department of Justice. “It’s definitely gonna get litigated.”

    Appointed to the Fed board by former President Joe Biden in 2022, Cook is the first Black woman to serve as a Fed governor.

    While the firing may be challenged in courts, even going up to the Supreme Court, Trump’s firing of Cook puts the central bank of the world’s largest economy in uncharted waters.

    For example, it’s unknown whether Cook would have to leave the Fed’s board immediately, and if so, will Trump have the opportunity to nominate someone else to fill her seat. Cook’s attorney, Abbe David Lowell of Lowell & Associates, said in a statement to CNN: “We will take whatever actions are needed to prevent his attempted illegal action.”

    The Fed’s next monetary policy meeting is less than a month away, over September 16 and 17.

    Last week Cook released a statement saying she would not be “bullied” into resigning.

    “I have no intention of being bullied to step down from my position because of some questions raised in a tweet. I do intend to take any questions about my financial history seriously as a member of the Federal Reserve and so I am gathering the accurate information to answer any legitimate questions and provide the facts,” she said in that statement.

    Fed independence at risk

    The Fed is designed to be independent from politicians specifically so it can focus on economic data – and not political considerations – in achieving its dual mandate to keep price increases in check while supporting the job market.

    Politicians often prefer lower interest rates, aiming to boost stock prices and make it cheaper for people to borrow money, both popular moves among voters. But lower interest rates risk igniting price pressures. On the other hand, leaving rates too high could overly restrict spending and hiring, hurting the economy.

    No central bank gets it right all the time. However, studies strongly suggest that economies with independent central banks experience better outcomes, including lower inflation.

    If the move costs the US its economic credibility, American assets, such as stocks and the dollar, could get hammered. That in turn could leave investors to demand higher premiums to lend money to the US.

    “The bigger picture is sadly simple: The Fed is designed to be independent of politics, for very good reasons,” Alan Blinder, a former vice chair at the Fed told CNN Monday night. “He is trying to end that and make it an arm of the Trump administration, which will be very bad for monetary policy if it happens.”

    Senator Elizabeth Warren, the top-ranking Democrat on the Senate Banking Committee, said in a statement that Trump’s attempt to fire Cook is “an authoritarian power grab that blatantly violates the Federal Reserve Act, and must be overturned in court.”

    Representatives for Republican Senator Tim Scott, who leads the committee, did not immediately respond to CNN’s request for a comment.

    Immediately following Trump’s announcement on Monday, the US dollar index dropped by 0.3%. The index measures the strength of the dollar against a basket of international currencies.

    US stock futures, meanwhile, slid further after a day in the green. Dow futures fell 100 points, or 0.2%. S&P 500 futures fell 0.3%. Nasdaq 100 futures slipped 0.5%.

    The price of gold, which is considered a safe haven asset during times of uncertainty, rose 0.45%.

    This story has been updated with additional context and developments.

    Elisabeth Buchwald, Bryan Mena and CNN

    Source link