New York AG Letitia James pleads not guilty to mortgage fraud charges

New York Attorney General Letitia James, appearing in a federal courtroom in Norfolk, Virginia, pleaded not guilty Friday to charges of alleged mortgage fraud, after she was indicted earlier this month by President Donald Trump's handpicked U.S. attorney.

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

"Not guilty, judge, to both counts," said James, entering the plea herself.

The judge in the case set an initial trial date for Jan. 26, to which both the government and the defense agreed.

The trial is expected to take "no more" than two weeks, said government attorneys, who estimated they will call between 8 to 10 witnesses.

Interim U.S. Attorney Lindsey Halligan -- whoTrump appointed just days after calling on the his attorney general toact "NOW!!!"to prosecute James and other political enemies -- secured the indictment against James on Oct. 9.

Halligan was named U.S. attorney by Trump afterTrump oustedher predecessor, Erik Siebert, who sources say had expressed doubts internally about bringing cases against James and former FBI Director James Comey.

James, who successfully brought acivil fraud caseagainst Trump last year and leads multiple lawsuits challenging his administration's policies, was indicted on charges that she committed mortgage fraud related to a home she purchased in 2020.

According to the indictment, James falsely described the property as a second home to get an advantageous mortgage rate, but used it as an "investment property," rented to a family of three. The indictment alleged James collected thousands of dollars in rent and would have saved $17,837 over the life of the mortgage versus a loan at a higher rate.

"No one is above the law. The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public's trust," Halligan said in a statement announcing the charges. "The facts and the law in this case are clear, and we will continue following them to ensure that justice is served."

But in an internal memo to Siebert in September, prosecutors said James purchased the home in Norfolk, Virginia, for her great-niece and immediately allowed her and her children to begin living in the house rent-free,sources told ABC News. Prosecutors met with James' niece, who stated that she had never signed a lease, had never paid rent for the home, and that James had often sent her money to cover some of the expenses, the memo concluded, according to sources familiar with its contents.

"It's baseless," James said of the charges this month."It's nothing more than retribution, retribution for doing my job."

Attorneys representing James filed a motion Thursday signaling their intent to challenge Halligan's appointment as unlawful. A similar motion challenging Halligan's appointment was filed in the case against Comey.

James' defense attorneys also filed a motion to the court to enforce rules prohibiting leaks from prosecutors, after a Monday report by Anna Bower of the online publication "Lawfare" contained Signal text messages exchanged between Halligan and Bower in the days after charges were filed against James.

"In initiating this contact, Ms. Halligan -- the lead prosecutor on this case as of the date of this filing -- commented on the credibility and general strength of the evidence presented to the grand jury," the filing states.

James' lawyers argue in their filing that Halligan's comments to Bower run afoul of the Federal Rules of Criminal Procedure, the Code of Federal Regulations, local court rules, the Justice Department Manual, and rules of ethical and professional responsibility.

James' indictment on Oct. 9 came between the indictments of Comey and former Trump national security adviser John Bolton amid what critics call Trump'scampaign of retributionagainst his perceived political foes.

Vice President JD Vance has said any such prosecutions are "driven by law and not by politics."

If convicted, James faces a maximum of up to 30 years in prison per count, up to a $1 million fine on each count, and forfeiture of the property.