Luc Cohen and Jack Queen
Reuters’ review of eight-year court records shows that allies of President Donald Trump have urged to accuse Fed Gov. Lisa Cook and two other prominent political enemies of crimes that the federal government has rarely prosecuted.
According to Reuters’ cases involving more than 600 false statements involving lenders, the Justice Department and others misunderstood Cook and others’ main residences, and investigated Cook and others.
Only one of these 20 cases is an independent criminal charge of misstatement of mortgage applications. All others are part of a broader indictment involving large-scale crime plans, such as fostering drugs or bank fraud, the review shows.
Cook and the Justice Department’s investigation two other targets, New York Attorney General Letitia James and U.S. Senator Adam Schiff denied wrongdoing.
Trump critics say that even if the charges were not ultimately filed, criminal investigations and public airing of the act-related allegations were initiated, which were rarely accused of by the federal government, aimed at revenge and pressure.
“There are few (if any) federal prosecutors filed federal fraud charges against a single borrower who borrowed this type of false statement,” said Matthew Edwards, a law professor at the Zicklin Business School of Baruke College, a mortgage fraud expert.
Cook’s investigation came when Trump tried to lower the pressure on interest rates to the Fed. Republican Trump has repeatedly slammed James for his fraud against him and his family, while Schiff, a Democrat, led the House of Representatives inquiry, leading Trump’s impeachment in 2019.
According to sources familiar with matters and documents seen by Reuters, the Justice Department investigated on the recommendation of Federal Housing and Finance Director William Pulte. The investigation was conducted by longtime Trump ally and Justice Department official Ed Martin, who posted a photo of himself on social media in August, showing himself standing outside James’ Brooklyn, wearing a trench coat.
Pulte, who regularly posts information about allegations of mortgage fraud on social media, said the administration has not selected to target Trump’s opponents.
“Contrary to what the fake news media said, U.S. federal housing is criminally criminally introduced to people of every political party,” he said in an article published on X on August 26.
A FHFA spokesman did not respond to Reuters’ questions about Pulte’s reference to the Justice Department’s Republicans.
“Where we find it, we will eliminate mortgage fraud and will not be intimidated by media such as the author of this article,” the spokesperson said.
A Reuters investigation found that Pulte’s father and stepmother claimed that two homes were their primary residences in wealthy communities in Michigan and Florida, which was the basis of Pulte’s allegations against Cook.
The Justice Department did not respond to a request for comment.
Rare fees
The only time the federal government has just been to misunderstand its primary residence was in 2017 alleged to mislead that a property he owned in Puerto Rico was his primary residence, his primary residence to ensure a bank receives a $203,605 return mortgage, part of a federal program designed to keep seniors in their homes, part of his home.
The man pleaded guilty in 2021 and was ordered to return the money and pay a $7,500 fine. He was not in jail.
Two of the other cases of such misstatements involve people who allegedly told the banks that they purchased the main residence in Maine but then used the properties to grow marijuana.
Reuters review does not cover state prosecutions.
Under U.S. law, there is a felony that intends to make false statements to a federal government insurance bank to obtain a loan, which is a felony sentenced to 30 years in prison.
Legal experts say any successful federal mortgage fraud prosecution needs to show that the recipient of the loan knows that they are lying in the house as their primary residence. Simply submitting the wrong information is not enough to ensure a conviction.
In an April letter to the Justice Department about James, Pulte said in her mortgage application that the Virginia property she purchased in 2023 was her primary residence, even if she lives in New York.
James mistakenly said the property would be the primary residence, her attorney, Abbe Lowell said. He said she made it clear in other documents that this was not her primary residence and that her agent understood it.
Loans for major homes are lower than mortgages for investment properties or second homes, and banks believe that risks are higher. It is unclear whether the lenders of James, Schiff or Cook consider their expected use in determining tax rates.
In a civil case James filed a lawsuit against Trump, a New York state judge found in 2023 that Trump misled the bank to value his family’s real estate company’s property to obtain favorable loan terms.
New York State’s appeals court in August revoked James’ $464 million verdict against Trump, but the full lower court ruling was Trump’s responsibility for civil fraud.
Both Trump and James are attracting people.
Powerful signal
Stewart Stewart Sterk, a professor at Cardozo Law in New York, said the Trump administration sends a signal to the threat of prosecuting mortgage fraud that when the other party gains power, politicians’ selective enforcement of the law from one party can be met with a one-party response.
“If both sides, whether Republicans or Democrats, use prosecutor discretion as a political weapon, it’s a very troublesome issue,” Stelke said.
In Schiff’s case, Pulte’s office handed him over to the Justice Department because he declared a house he owned in Maryland near Washington as his primary residence. The lender who provides mortgages for his homes in California and Maryland knows he uses it all year round, Schiff’s office said.
“The allegations against Senator Schiff are transparent, stale and long-debunked,” Schiff’s attorney Preet Bharara said in a statement.
Pulte listed multiple properties as primary residence when applying for a mortgage, accusing Cook of fraud, which may be to ensure lower interest rates. Cook owns properties in Michigan, Georgia and Massachusetts.
Trump terminated Cook last month on charges, prompting her to file a lawsuit, challenging his efforts to remove her. Reuters reported on Thursday that the Justice Department had issued a grand jury subpoena in her investigation.
Lowell also said on behalf of Cook that the Justice Department is scrambling to fire the federal governor for Trump’s overthrow of the reason for overthrow.
“He wants cover, they are providing cover,” Lowell said Thursday.
(Reported by Luc Cohen and Jack Queen in New York; Editors of Noeleen Walder, Amy Stevens and Michael Learmonth)
