WASHINGTON, May 9, 2025 (BSS/AFP) - The US Justice Department has opened a criminal probe of New York state Attorney General Letitia James, one of President Donald Trump's main adversaries, for alleged mortgage fraud, newspapers reported Thursday.

The investigation comes after the head of the Federal Housing Finance Agency (FHFA), a Trump appointee, alleged that James "appeared to have falsified records" related to properties in Virginia and New York to obtain better loan terms.

James has denied wrongdoing and said in a statement last month when reports emerged that she may be a target that she "will not be intimidated by bullies."

The Albany Times-Union and Guardian newspapers, which first reported the probe, said the criminal investigation into James's real estate dealings involved the Justice Department and the FBI.

The Washington Post said it is believed to be the first criminal investigation by the administration involving a law enforcement official who took action against Trump.

James, a Democrat, drew the wrath of Trump after leading a civil fraud case against him that saw the Republican ordered to pay a huge penalty last year.

Trump was found liable of fraud by conspiring to alter his net worth to get better loan and insurance terms. Trump and his older sons were ordered to pay $454 million.

Trump and his allies regularly attacked James during the trial in New York, and he has put revenge against his foes high on the agenda since returning to the White House in January.

FBI and Justice Department staff involved in criminal cases against Trump have been fired, among other acts of retribution.

According to the Washington Post, a grand jury has issued subpoenas related to a mortgage application in which James stated that a Virginia home would be her primary residence.

James's lawyer Abbe Lowell said in a letter to US Attorney General Pam Bondi that his client was actually helping her niece purchase the property and the documents clearly stated she would not be living in the home, the Post said.

William Pulte, the head of the FHFA, had "cherry-picked" one paperwork mistake in the loan application package in seeking his criminal referral, Lowell added.