A federal mortgage fraud investigation involving New York Attorney General Letitia “Tish” James advanced Friday when Department of Justice Special Attorney Ed Martin was seen inspecting her multi-family property in Brooklyn.
Martin’s visit came just one week after Attorney General Pam Bondi appointed him to oversee parallel mortgage fraud probes into James and California Senator Adam Schiff.
Martin, wearing a beige trench coat, was observed at James’ Clinton Hill brownstone located at 296 Lafayette Avenue.
The property is at the center of allegations that James misrepresented the building’s classification on multiple official documents to obtain favorable mortgage terms.
Grand juries in Virginia and Maryland are currently considering potential indictments for James and Schiff.
Both face accusations of falsifying property records to gain access to more beneficial loan conditions.
James’ Brooklyn property is classified as a five-unit dwelling.
However, investigators allege she described the building as a four-unit residence on mortgage applications, building permits, and government assistance filings.
By doing so, she allegedly qualified for loans through Fannie Mae and Freddie Mac, which restrict favorable terms to properties with four or fewer units.
The arrangement would have allowed her to receive loans with reduced down payments and more favorable interest rates.
On Friday afternoon, when Martin inspected the site, the property displayed one main doorbell at the front entrance and four additional doorbells at a side entrance.
Labels read “1 Floor,” “2 Floor,” “3A,” and “3B,” indicating multiple separate units.
While outside the property, Martin and a colleague were confronted by a local resident.
The middle-aged woman, dressed in navy gym shorts and a black tank top, questioned the federal attorney’s presence.
“Tell me why you’re here,” the woman said.
“We know who lives here . . . You’re not here about the houses. You’re here because of who lives here. It’s my neighborhood. It’s my block. I have a right to know what you guys are doing.”
Martin responded: “I’m just happy to be on a block looking at houses . . . I’m just looking at houses, interesting houses. It’s an important house.”
The neighbor replied, “It’s not. It’s just like every other tract house on this block that was built by developers.”
“They’re beautiful, beautiful neighborhood,” Martin told her before leaving.
The Justice Department’s investigation into James began in April following a criminal referral from Federal Housing Finance Agency Director Bill Pulte.
Pulte alleged James may have “falsified bank documents and property records to acquire government backed assistance and loans and more favorable loan terms.”
He cited concerns over a Norfolk, Virginia, property James purchased in 2023, which she reportedly claimed as her “principal residence” while serving as New York attorney general.
According to the referral, James listed her Brooklyn brownstone as a second residence.
Further allegations contend James and her father signed mortgage papers identifying themselves as “husband and wife” in order to satisfy certain lending rules.
Both James and Schiff deny all allegations of wrongdoing.
Special attorneys such as Martin are authorized to conduct criminal proceedings in sensitive or high-profile cases.
Their powers include overseeing grand jury investigations and prosecutions, and they can operate outside the federal districts where cases are typically handled.
Martin commented last week on the origins of the investigation.
“Bill Pulte and his FHFA team got this started with his criminal referral,” he said.
“And as Tish James and Adam Schiff always say: ‘Nobody is above the law.’ ”
As of now, both grand jury proceedings in Virginia and Maryland remain ongoing.
No indictments have yet been announced, but Martin’s visit to Brooklyn marked a notable step forward in the Justice Department’s inquiry into the allegations against James.
