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KOLUMN Magazine
When the Grand Jury Says No
Ordinary citizens twice refused to indict Letitia James. Their quiet rebellion may be the loudest verdict yet on Trump’s justice agenda.
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The federal grand jurors were done before lunch.
Inside the brick courthouse in Norfolk, Virginia, the panel filed out without a word to the cameras outside. Down the hall, New York Attorney General Letitia “Tish” James—who had spent the fall shuttling between this city and Albany, straddling her role as one of the country’s most prominent law enforcers and as a criminal defendant—learned that the Justice Department had failed, again, to convince ordinary citizens that she should be indicted for mortgage fraud.
It was the second time in less than two weeks that a grand jury had refused to charge her. Ten days earlier, a federal judge had tossed out the original indictment, ruling that the Trump administration’s handpicked prosecutor had been unlawfully installed. Now, even after the case was repackaged and re-presented by a different U.S. attorney, jurors said no.
Outside, James repeated a phrase that had become a kind of mantra over weeks of court appearances and rally speeches: she would not be bullied. That framing—of a powerful prosecutor cast as a defendant fighting back against the machinery of federal law—has become the central narrative of a prosecution that began with a $18,933 dispute over a mortgage and has spiraled into a referendum on the weaponization of the Department of Justice, the fragility of prosecutorial independence, and the racialized politics of accountability in the Trump era.
A recent feature in KOLUMN Magazine, titled “I Will Not Be Bullied: Inside the Political Prosecution — and Collapse — of the Case Against Letitia James,” traces that arc through James’s own biography and the paper trail left by regulators, prosecutors, and bank investigators who handled her loan. Their reporting, alongside accounts from national outlets, helps explain how a seemingly technical dispute between a borrower and her lender became a test case for what happens when politics saturate the justice system.
How a Norfolk Mortgage Became a Federal Case
The basic allegation is straightforward. In October 2025, a federal grand jury in the Eastern District of Virginia indicted James on one count of bank fraud and one count of making false statements to a financial institution. The charges centered on how she described a Norfolk, Virginia home she bought in 2020. Prosecutors said she misclassified the property’s intended use and misstated aspects of her finances in order to secure a more favorable rate, saving roughly $18,933 over the life of the loan.
To the Trump Justice Department, this was—at least in its public telling—nothing more than a “garden variety mortgage fraud prosecution.” A borrower, even a powerful one, is alleged to have misled a bank; the bank is a victim; prosecutors follow the facts.
James, a Democrat best known nationally for bringing a sweeping civil fraud case against Donald Trump and the Trump Organization in New York, described the indictment very differently. From her arraignment onward, she called the charges retaliatory, arguing that the president had explicitly demanded her prosecution as payback for state investigations that threatened his family business and political brand.
Court documents and subsequent reporting filled in the picture. As KOLUMN and other outlets have described, internal investigators at Fannie Mae—the government-backed mortgage giant that purchased James’s loan—reviewed the file and concluded there was no clear and convincing evidence of fraud. They viewed the issues as the kind of occupancy and documentation questions that are ordinarily handled through civil remedies: loan modifications, buybacks, or quiet negotiations between lender, borrower and regulator—not felony charges carrying decades of potential prison time.
But the matter did not end with Fannie Mae’s skepticism. Instead, according to James’s legal filings, the case was pushed forward by the Federal Housing Finance Agency, which regulates Fannie and Freddie Mac, under Director Bill Pulte, a Trump ally. The referral to prosecutors allegedly relied on Pulte’s own calculations of supposed discrepancies, mirroring the figures that later appeared in the indictment.
For James’s lawyers, that chain of events—career investigators doubtful, political appointee insistent, and DOJ ultimately adopting the appointee’s theory—was Exhibit A in their argument that this was not how federal mortgage fraud cases usually come together.
A Prosecutor Without Authority
If the origins of the case raised questions, the choice of the prosecutor who shepherded it into court detonated them.
Lindsey Halligan, a Trump ally and former private attorney for the president in the Mar-a-Lago documents case, was installed as interim U.S. attorney in the Eastern District of Virginia after her predecessor reportedly declined to pursue charges against James. From the moment her appointment was announced, legal commentators flagged concerns: the odd path she took around Senate confirmation; the tight timeline; the perception that she had been handpicked to carry out Trump’s long-stated desire to “go after” his critics.
Once in office, Halligan brought not only the James case, but a parallel indictment of former FBI Director James Comey, another Trump antagonist. Ethics watchdogs later accused her of abusing her power and violating grand-jury secrecy rules, alleging that she shared internal details about evidence and strategy with a legal journalist while the matter was pending.
In late November, those concerns crystallized into a legal earthquake. U.S. District Judge Cameron McGowan Currie dismissed the indictments against both James and Comey, ruling that Halligan’s appointment had violated federal law and that all actions taken under her defective authority—including the grand-jury vote—had to be set aside. The decision was “without prejudice,” a procedural term that left the door open for prosecutors to try again with a lawfully appointed U.S. attorney.
The ruling did not address whether James had committed fraud. Instead, it focused on process: who is allowed to wield the awesome power of the federal government, and under what constraints. In a line that civil-rights and good-government groups quickly seized upon, the court warned that permitting such a flawed appointment to stand would erode separation-of-powers safeguards meant to keep prosecutorial decisions tethered to law, not politics.
Grand Juries Push Back
Within days of Judge Currie’s opinion, the Justice Department tried again.
This time, a different U.S. attorney’s office presented a revised case to a federal grand jury in Norfolk. Prosecutors pared back some of the original rhetoric, refocused on the loan forms, and emphasized what they described as misrepresentations to the bank about whether the Norfolk house was a second home or an investment property.
Such re-presentations are not unusual when a case is dismissed on technical grounds. What is unusual is what happened next.
On December 4, jurors declined to indict. After reviewing witness testimony and documentary evidence, the panel voted down the proposed charges. According to multiple reports, this was the second time in recent weeks that a grand jury had declined to move the case forward.
Federal grand juries are often described, sometimes with exaggeration, as rubber stamps for prosecutors; they approve the overwhelming majority of proposed charges. That context makes the James outcome particularly striking. Here, two sets of ordinary citizens—drawn from a region where Trump remains popular—have now either seen a structurally defective prosecution thrown out or refused to resurrect it in revised form.
In a brief statement after the latest vote, James said the grand jury’s decision underscored what she had argued from the day of her indictment: that the charges were “baseless” and part of “unchecked weaponization” of the justice system. Justice Department, for its part, has not ruled out seeking a third indictment, though each failed attempt raises the political and institutional costs of continuing.
For readers following the story from New York, one clarification matters: despite some shorthand references to a “New York grand jury,” the panels that have refused to indict James sit in Virginia, not in Manhattan or Albany. The case is federal, not state; the jurors are drawn from communities hundreds of miles from the neighborhoods where James built her career.
The Politics of Prosecution
Looming over every stage of the case is James’s history with Donald Trump.
As New York attorney general, she led the civil investigation that culminated in a blockbuster fraud judgment against Trump and his company, resulting in hundreds of millions of dollars in penalties and restrictions on his ability to run businesses in the state. During and after that litigation, Trump attacked her in personal and racially charged terms, calling her “corrupt” and “racist,” and openly promising retribution if he returned to the White House.
When the Justice Department he now oversees sought to criminally prosecute her over a single mortgage, civil-rights groups and legal scholars saw a chilling through-line. The National Urban League described the case as “blatant targeting” of a Black woman who had used state power to hold a president to account. The NAACP amplified coverage of the grand jury’s refusal to indict as evidence that voters and citizens were not buying the administration’s narrative.
At the same time, conservative legal organizations and Trump allies have portrayed James as the real political actor. America First Legal and other groups have filed bar complaints accusing her of using her office to persecute Trump, arguing that the mortgage case is proof that she is not above the laws she enforced so aggressively against others. Representative Elise Stefanik, a possible Trump running mate, has urged New York’s attorney-discipline authorities to sanction James for “biased” and “prejudicial” comments about the former president.
The result is a hall-of-mirrors politics in which each side accuses the other of weaponizing law. James and her supporters see a president harnessing federal prosecutors to punish a state official who embarrassed him. Trump’s allies see a state attorney general who stretched civil-fraud statutes to cripple a political rival, now facing the same kind of scrutiny she once directed outward.
What is new in the wake of the grand jury’s decision is that ordinary citizens—rather than appointed judges or partisan officials—have placed a check, however limited, on that escalation.
What It Means for Borrowers and Bank Customers
Beneath the high-profile names and institutional clashes lies a narrower question: how does the justice system typically handle disputes between banks and borrowers, and what does it mean that this one became a national spectacle?
Mortgage-fraud prosecutions surged after the 2008 financial crisis, when federal prosecutors targeted schemes that cost lenders and investors billions: networks of straw buyers, falsified income documents, serial “flip” operations. In those cases, the victims were often diffuse—banks, securitization trusts, institutional investors—but the scale made the criminal approach unmistakable.
By contrast, James’s case turns on a single loan on a modest property, in which the institution that ultimately bought the mortgage, Fannie Mae, reportedly told internal colleagues it did not see a clear, prosecutable fraud. As KOLUMN reported, investigators there raised precisely the kind of questions many homeowners encounter—about occupancy, income classifications, and post-closing use of a property—that are usually resolved in the fine print of loan workouts or regulatory audits.
For ordinary bank customers, particularly Black and brown borrowers, that dissonance hits a nerve. Research over the past two decades has documented how communities of color were disproportionately steered into high-cost loans before the crash, were more likely to face aggressive foreclosure and debt collection and yet have seen relatively few high-level executives prosecuted when banks engaged in discriminatory or abusive practices.
Now, in James, many see the inverse: a Black woman at the pinnacle of legal power facing the full weight of federal criminal enforcement over a dispute that internal investigators did not deem serious enough to call fraud. Civil-rights advocates worry that this asymmetry—where elite borrowers of color can be singled out even when “victim” institutions are skeptical, while systemic abuses by lenders themselves often languish—deepens mistrust in both the financial and legal systems.
James herself grew up watching those systems from the outside. As KOLUMN recounts, she began her career as a public defender, then as a lawyer in the state attorney general’s office, representing tenants and low-income New Yorkers whose disputes with landlords and creditors rarely made the front page. Her political identity has long been tied to those “everyday” cases—people in Brooklyn or Buffalo trying to keep a roof over their heads, not necessarily the Manhattan skyscrapers that now define her public profile.
In that light, the mortgage case has become, for her allies, a story about who gets treated like a typical bank customer and who becomes a symbol.
A System on Trial
The collapse of the case against James is not a formal acquittal. No jury has heard evidence about her mortgage and issued a verdict of “not guilty.” A federal judge vacated the first indictment because the prosecutor lacked lawful authority; two grand juries have now refused to approve a second. As of this writing, the Justice Department retains the technical ability to try again.
But the pattern of institutional pushback—by a federal judge, by grand jurors, by bar authorities reviewing complaints against prosecutors—has turned the spotlight away from James’s loan and onto the system itself.
Legal scholars at groups like the Brennan Center for Justice and international bar associations have been warning, for years, that Trump’s second term has tested norms that once insulated the Department of Justice from raw political pressure. They point to the James case, and the parallel prosecutions of other Trump critics, as proof of how quickly those norms can fray when the president and his allies treat law enforcement as another partisan weapon.
At the same time, those scholars emphasize that the rule of law is not only about restraining presidents. It also depends on whether the system can hold powerful actors—state attorneys general, cabinet secretaries, presidents themselves—to account when they break the law. For some, the basic allegation in the James indictment—that a top law-enforcement official lied on a mortgage application—raises uncomfortable questions about double standards if it goes entirely untested in court.
That tension—between resisting political show trials and ensuring that elites are not exempt from ordinary rules—is what makes the grand jury’s refusal to indict both clarifying and incomplete. It tells us something about how ordinary citizens view this particular case, at this particular moment. It does not settle the broader fight over when, and how, powerful officials should answer for alleged misconduct.
For now, what’s clear is that a prosecution conceived in the upper echelons of Washington power has been slowed, and perhaps stopped, by some of the few actors in the system who do not owe their jobs to any president: a federal judge with life tenure, and two panels of citizens summoned from voter rolls and driver’s-license lists.
In the KOLUMN piece, the authors describe James walking out of the Norfolk courthouse on a gray November morning, “no longer facing the prospect of decades in prison.” The grand jury’s latest decision extends that reprieve. Whether it also becomes a turning point in the debate over politicized prosecutions—or merely another skirmish in a long, exhausting war over who owns the justice system—will depend on what the Justice Department, the White House, and voters choose to do next.