New York Attorney General Letitia James is facing intense scrutiny as she ramps up campaign fundraising efforts just days after being accused of mortgage fraud by the Trump administration. The allegations, which have culminated in a criminal referral to the Department of Justice, center on James’ handling of property purchases and could potentially lead to serious legal consequences. Despite the mounting controversy, James is pressing forward with a high-profile fundraiser aimed at bolstering her 2026 re-election campaign, raising questions about her priorities and the timing of her financial push.
The accusations against James stem from a criminal referral submitted by a Trump administration official to Attorney General Pam Bondi and Deputy Attorney General Todd Blanche. According to documents reviewed by the New York Post, James is alleged to have misrepresented key details about properties in Virginia and Brooklyn to secure favorable mortgage terms. Specifically, the referral highlights a Virginia property purchased by James in 2023, which she designated as her “principal residence” despite actively serving as New York’s attorney general at the time. New York state law mandates that attorneys general maintain residency in the state for at least five years prior to running for office and throughout their term, casting doubt on the legitimacy of James’ claim.
A power of attorney document tied to the Virginia purchase, signed by James, explicitly states, “I intend to occupy this property as my principal residence.” This declaration has raised red flags, as it appears to conflict with her role and residency requirements in New York. The referral, penned by Federal Housing Finance Agency (FHFA) Director William Pulte, also points to a Brooklyn property James purchased in 2001. According to Pulte, James “consistently misrepresented” the Brooklyn property as having only four units in building permit applications and multiple mortgage documents. This misrepresentation allegedly allowed her to secure a lower mortgage rate and reduced payments under the federal Home Affordable Modification Program (HAMP).
The timing of these allegations is particularly striking, as they come on the heels of James’ high-profile civil fraud trial against the Trump administration. In that case, James accused the Trump organization of undervaluing multiple properties, leading to a $454 million judgment. The parallels between the accusations against James and the charges she leveled against Trump have fueled speculation about political motivations behind the criminal referral. Critics argue that the Trump administration’s move may be an attempt to discredit James, who has been a vocal adversary of the former president. Supporters of the referral, however, contend that the evidence of fraud is clear and warrants investigation.
Amid these swirling allegations, James is moving forward with a high-dollar fundraiser scheduled for Tuesday at the residence of left-wing activists Rod Graves and Rob Smith, the latter being the CEO and founder of “The Phluid Project,” a gender-neutral clothing brand. The event, promoted as a key fundraiser for James’ 2026 re-election campaign, has entry-level tickets priced at $500, with maximum contributions reaching $18,000—the legal limit for campaign donations in New York. The official invitation to the event features a photo of James standing alongside a gay pride flag, signaling her alignment with progressive causes. The choice of venue and imagery has sparked debate, with some praising James’ commitment to inclusivity and others questioning the optics of hosting a lavish fundraiser while under investigation.
The fundraiser has drawn sharp criticism from opponents who argue that James’ focus on campaign contributions at this juncture is tone-deaf. The allegations of mortgage fraud, if substantiated, could have far-reaching implications for her political career and public image. Falsifying records to secure favorable loan terms is a serious accusation, and the referral to the Department of Justice suggests that federal authorities may take the matter seriously. For James, the stakes are high: a criminal investigation could derail her re-election bid and tarnish her reputation as a champion of accountability.
James’ defenders, however, dismiss the allegations as a politically motivated smear campaign. They point to her track record as a tough-on-crime attorney general who has taken on powerful figures, including Trump, without hesitation. Her supporters argue that the timing of the criminal referral—coming just weeks after her legal victory against the Trump organization—is no coincidence. They contend that the accusations are an attempt to distract from James’ accomplishments and weaken her standing as a prominent Democratic figure.
The controversy surrounding James is likely to intensify as the fundraiser approaches and the Department of Justice reviews the criminal referral. For now, James appears undeterred, focusing on rallying financial support for her campaign. The event at Graves and Smith’s residence is expected to draw a mix of progressive donors and political insiders, all eager to back James in what promises to be a contentious re-election battle. Yet, the specter of a federal investigation looms large, and the outcome could reshape the political landscape in New York.
As the allegations unfold, James’ actions will be closely watched. Her decision to prioritize fundraising in the face of serious accusations may embolden her critics, who see it as evidence of misplaced priorities. At the same time, her supporters view her resilience as a sign of strength, arguing that she will not be intimidated by what they describe as baseless attacks. The coming weeks will be critical for James, as she navigates the dual challenges of defending her record and maintaining her political viability.
The situation underscores the high-stakes nature of New York politics, where legal battles and public perception often intersect. For James, the path forward is fraught with uncertainty, but her response to these allegations will likely define her legacy. Whether she can weather this storm and emerge stronger remains to be seen, but one thing is clear: the controversy surrounding Letitia James is far from over.
