The Department of Justice is moving forward with a criminal investigation into allegations that Federal Reserve Governor Lisa Cook falsified bank documents and property records to obtain better loan terms on two properties she claimed as principal residences, The Wall Street Journal reported Thursday.
President Trump is attempting to remove Cook, a Biden appointee, from the Federal Reserve Board, citing allegations made in two criminal referrals last month by Federal Housing Finance Agency Director Bill Pulte.
Cook has yet to be charged with a crime, and has sued the Trump administration and the Fed to keep her job. Her attorneys in that case maintain that “she did not ever commit mortgage fraud” and was never formally notified of the allegations leveled by Pulte or given an opportunity to defend herself.
An attorney for Cook referred Inman Thursday to a spokesperson who did not immediately respond to a request for comment.
The DOJ investigation centers on Pulte’s original criminal referral letter to the Department of Justice, the Journal reported, citing anonymous officials “familiar with the matter.”
Pulte’s Aug. 15 criminal referral alleged that in the span of two weeks in 2021, Cook claimed properties in Ann Arbor, Michigan and Atlanta, Georgia as her principal residence.
If true, that would not necessarily constitute mortgage fraud — which usually requires evidence of deceit and harm to the lender, New York real estate attorney Massimo D’Angelo told the Journal.
DOJ investigators are using grand juries and have issued subpoenas to investigate whether the allegations in Pulte’s first referral warrant charging Cook with mortgage fraud, the Journal reported.
The Justice Department declined to comment, but other news organizations including the Associated Press and New York Times, have independently confirmed that investigators are issuing subpoenas.
Pulte sent a second criminal referral letter on Aug. 28 concerning a condo Cook owns in Cambridge, Massachusetts. Cook allegedly represented to lenders that the condo was a second home, but later classified it as an investment property in federal financial disclosures.
The allegations against Cook are a pretext for Trump’s real goal, her attorneys say: To undermine the Fed’s independence and lower interest rates.
If he succeeds in ousting Cook and naming a replacement, Trump will have appointed four of the seven members of the Fed’s Board of Governors. That could also open the door for the Trump administration to exert control over the appointments of regional bank presidents in February.
But if investors who fund most mortgages and government debt come to believe that the Fed is no longer independent, that could send mortgage rates up, even if the Fed lowers rates, skeptics say.
Two prominent Republicans added their voices to that camp Wednesday, saying it’s too soon to say whether Cook did anything wrong — and that the Trump administration’s attempts to remove her from the Fed could end up doing more harm than good.
“Presidential control of monetary policy would be a threat to financial stability and American prosperity,” former Senate Banking Committee Chair Phil Gramm and former House Financial Services Chair Jeb Hensarling said in a Wall Street Journal editorial.
“We don’t have sufficient information to judge whether she violated the law or engaged in unethical conduct worthy of removal,” Gramm and Hensarling wrote. “There has yet to be a formal investigation, and she has not been formally charged, much less convicted, of anything. Her ‘for cause’ firing appears to be another assault on monetary policy independence.”
Asked about Gramm and Hensarling’s editorial Thursday, Pulte told CNBC Squawk Box that he’s “never seen people support crime like this — this is insane.”
“Alleged crime,” Pulte conceded. “Let’s call it that. What she did was wrong. The fact that she hasn’t come out and said, ‘Hey, these aren’t my documents,’ or [provided] some rational explanation for this alleged crime — why is she not doing it? It doesn’t make any sense.”
Asked if Cook is being tried in the court of public opinion — and should have a chance to defend herself before being removed from her position — Pulte said “I would defer to the lawyers on that.”
“I believe she will be indicted,” Pulte said of Cook. “She will have her day in court, just like any American.”
In an Aug. 21 interview with Bloomberg Television, Pulte said the FHFA makes “multiple” criminal referrals to the Department of Justice each week, and pursues cases regardless of a borrower’s party affiliations or status.
“If it’s a Republican who’s committing mortgage fraud, we’re going to look at it,” Pulte said. “If it’s a Democrat, we’re going to look at it. If it’s a wealthy politician or a lawyer, we’re going to look at it.”
ProPublica reported Thursday that three Trump Cabinet members have reported more than one home as a principal residence: Labor Secretary Lori Chavez-DeRemer, Transportation Secretary Sean Duffy, and Environmental Protection Agency chief Lee Zeldin.
“Real estate experts say claiming primary residences on different mortgages at the same time is often legal and rarely prosecuted,” ProPublica reported.
The three Trump Cabinet members denied wrongdoing, and a White House spokesperson called ProPublica’s reporting — based on publicly available financial disclosure forms, property records and mortgage data — “another hit piece from a left-wing dark money group.”
Martin leads mortgage fraud investigations
Pulte’s criminal referral letters were addressed to Attorney General Pam Bondi and a subordinate, Ed Martin, whom Bondi has put in charge of looking into similar allegations against two Trump administration political opponents: New York Attorney General Letitia James and Sen. Adam Schiff.
Grand juries in Virginia and Maryland are weighing criminal indictments for James and Schiff “over allegations they falsified property records to secure favorable loan terms,” the New York Post reported on Aug. 15.
Like Cook, James and Schiff deny wrongdoing and say the allegations against them are acts of political retribution aimed at intimidating them.
In her role as New York Attorney General, James won a $486 million civil fraud judgment against Trump last year that is under appeal. Schiff was the lead prosecutor making the case for Trump’s impeachment in the Senate in 2018.
Trump appointed Martin as the interim U.S. Attorney for the District of Columbia in January. In that role, Martin controversially fired or demoted dozens of Justice Department prosecutors who obtained convictions of Trump supporters who stormed the Capitol on Jan. 6, 2021.
Trump had to withdraw Martin’s nomination to fill the role on a permanent basis after Republican Sen. Thom Tillis said he would not vote to confirm him. Tillis said people who were convicted for their actions on Jan. 6 and were later pardoned by Trump, “made a stupid decision, and they disgraced the United States by absolutely destroying the Capitol,” the AP reported at the time.
Martin was appointed as the U.S. Pardon Attorney in May to look into pardons issued by President Biden, and to head a “Weaponization Working Group” that’s reviewing cases brought by the Justice Department against Trump and his supporters during the Biden administration.
At a May 13 press conference on his new role, Martin said that the DOJ intended to name and shame people even in instances where it lacked evidence to charge them.
“There are some really bad actors, some people that did some really bad things to the American people,” Martin said. “And if they can be charged, we’ll charge them. But if they can’t be charged, we will name them.”
“In a culture that respects shame, they should be people that are ashamed,” he said.
Good morning, America. How are ya’? pic.twitter.com/qb9Byy8rli
— Ed Martin (@EdMartinDOJ) August 20, 2025
On Aug. 20, Martin posted a picture of himself on the social media platform X, standing in front of Letitia James’ home, captioned “Good morning, America. How are ya’?”
Editor’s note: This story was updated to include recent comments by FHFA Director Bill Pulte, and a report by ProPublica alleging that three Trump Cabinet members have claimed more than one home as their principal residence.
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