Judge Hands DOJ Win In Letitia James’ Mortgage Fraud Case

The judge presiding over New York Attorney General Letitia James’ mortgage fraud case on Friday rejected a motion seeking to compel federal prosecutors to maintain a log of all their communications with the media.

Defense attorney Abbe Lowell had filed the request last week, following James’ arraignment on charges of bank fraud and making false statements. The motion cited a report alleging that U.S. Attorney Lindsey Halligan exchanged a series of encrypted Signal messages with a reporter regarding the case, the New York Post reported.

“[T]he defendant does not demonstrate that it is necessary for the Court to order the government to track communications with the media in any particular form,” wrote US District Judge Jamar Walker in his six-page order.

“The defendant’s request that the government be required to keep a communication log is DENIED,” the Biden-appointed judge ruled.

Walker further wrote that while Halligan’s Signal chat with Lawfare senior editor Anna Bower earlier this month was “unusual,” he nevertheless declined to offer an opinion “on whether they were improper in any sense, either legal or ethical.”

He went on to order federal prosecutors to follow all rules of the court but did not suggest that they had violated any so far.

He also ordered a “litigation hold preventing the deletion or destruction of any records or communications having to do with the investigation or prosecution of this case.”

Halligan’s Signal messages to the reporter were configured to automatically disappear after eight hours, The Post reported.

The judge did not address whether Halligan’s communications — which reportedly disputed a New York Times story revealing that James’ grandniece told a grand jury she had never paid rent on the Norfolk, Va., property at the center of the case — constituted material subject to discovery requirements.

“[T]he Court is not persuaded that preservation of evidence related to the government’s communications requires such evidence be maintained in any particular form,” Walker wrote. “The defendant does not demonstrate that a communication log is necessary, so the Court will not order the government to maintain one.”

“The Court trusts that counsel on both sides will comply with this Order without further handholding.”

In response to James’ motion, federal prosecutors requested that Judge Walker impose a gag order on the New York attorney general — a request he declined.

James pleaded not guilty last week to one count of bank fraud and one count of making a false statement to a financial institution.

According to the indictment, the longtime Trump adversary purchased a three-bedroom, one-bathroom home on Peronne Avenue in Norfolk on August 17, 2020, using a $109,600 loan that included a “second home rider” identifying her as the sole occupant. That designation allegedly allowed James to secure more favorable mortgage terms, saving her nearly $19,000.

However, prosecutors say the home “was not occupied or used” by James, but “was instead used as a rental investment property” to house her grandniece, Nakia Thompson.

If convicted on both counts, James faces up to 60 years in prison and a $2 million fine.

Last week, a Clinton-appointed federal judge has ordered the Department of Justice to turn over all internal records related to Halligan’s involvement in the criminal cases against James and former FBI Director James Comey.

Judge Cameron McGowan Currie, who sits in the District of South Carolina, issued the order Tuesday following requests from defense lawyers in both cases. The directive requires the Justice Department to submit, by 5:00 p.m. on November 3, all documents and grand jury materials showing Halligan’s role in the indictments — but only for private judicial review, shielding the contents from both defense counsel and the public.

The sealed, in camera review took place in Currie’s chambers at the Matthew J. Perry U.S. Courthouse in Columbia, according to reports.