There’s probably no prosecutable federal case, since the statute of limitations has expired.

I’ ve been looking into the criminal referral of Senator Adam Schiff (D., Calif.) by the Federal Housing Finance Agency (FHFA) to the Justice Department, on which our James Lynch reported Tuesday. It looks like Schiff, as Washington pols are wont to do, probably played fast and loose with residency reporting rules, which likely resulted in favorable mortgage rates in connection with homes that, to perform his job, he had to maintain in his home state of Californian and the D.C. metro area.

That said, most of this is ancient history: The federal statute of limitations on any mortgage fraud allegations has lapsed. Moreover, leaving aside that President Trump shouldn’t be speaking publicly about potential investigations at all, his claim that Schiff was required to “LIVE in California because he was a Congressman from California,” and that he therefore defrauded the voters by listing the Maryland home as his “primary residence,” is constitutionally infirm.

Background

Senator Schiff, of course, is a political archenemy of the president’s — he was (a) architect of the first Trump impeachment (the Ukraine kerfuffle) when Schiff led the House Intelligence Committee, (b) one of the House impeachment prosecutors in Trump’s second impeachment (over the Capitol riot and the events leading up to it), and (c) a member of the House January 6 Committee. While the president frequently castigates Schiff over these episodes, Californians rewarded him with a Senate seat.

The FHFA is run by William Pulte, whose background is in private equity and philanthropy, not housing policy. That’s fine: People from outside the system can often shake government bureaucracies out of their sclerotic ways. It’s worth observing, though, that Pulte got the gig because he is a Trump loyalist, not because he was some sort of visionary regarding the (dubious) role of government in housing. To this point, his most notable achievement has been to refer yet another Trump nemesis, New York Attorney General Letitia James, to the Justice Department for potential prosecution based on misrepresentations about properties she owns. (In my view, the James allegations are more substantial than Pulte’s allegations against Schiff.)

Schiff was first elected to the House as a representative of a California district in 2000. He was a member of the House for 24 years until being elected to the Senate last year. Like many federal lawmakers, especially those from states far from Capitol Hill, he has maintained two homes. Nothing wrong with that. For purposes of mortgage and tax law, however, a person can have only one primary residence. The FHFA allegation is that, while maintaining that his California home (he had different ones over the years) was his primary residence, he simultaneously, between 2009 and 2013, designated the Maryland home as his primary (or “principal”) residence when refinancing his mortgage on that property. Borrowers get more favorable rates on mortgages for their primary residences (the homes they are presumably living in) than other homes they own (which sometimes are investment or commercial vehicles, though they can also — as in Schiff’s case — be real homes for people whose work regularly takes them far away).

Schiff, who is 65, married his wife, Eva, in 1995, and they have two children. As investigative journalist Peter Schweizer has detailed, the Schiffs owned a home in Burbank, Calif., which they sold in 2003. At that time, they bought a home in Potomac, Md., an upscale D.C. suburb, while maintaining a furnished rental home in Burbank, which Schiff used as his residence for voting purposes.

(Legally speaking, a person may lawfully vote in only one state. For the most part, state law controls voting qualifications, and all states require the person to be a resident. The residence doesn’t necessarily have to be the state where the person’s primary residence is; it can be a different state, as long as the person has a residence and votes only in that different state. Politically speaking, it would be embarrassing for a federal lawmaker to represent one state while voting in another, but it wouldn’t necessarily be illegal.)

In February 2009, the Schiffs refinanced the Maryland home, claiming in the mortgage documents that it was their “principal residence.” They refinanced again in 2011 and 2013, basically doing the same thing each time. Meantime, they bought a condominium in Burbank in 2009, which Schiff listed as his residence when registering to vote.

‘Clerical Error’

Also in 2009, Schiff’s colleague, Representative Doris Matsui (D., Calif.), was investigated by the House Ethics Committee because she took a “homestead exemption” for her Maryland home (a tax break available only if the home was the taxpayer’s primary residence) even though she had claimed her California home as her primary residence.

Given the similarity of Matsui’s circumstances to his own, Schiff was asked about his Maryland home. Through staff, he responded that, because of a “clerical error,” the property “was incorrectly listed” as his primary residence. Yet, in the aforementioned 2011 and 2013 refinancings of the Maryland home, the Schiffs described it as their principal residence. (Favorable mortgage rates aside, it is unclear to me what, if any, tax advantages Schiff may have received by representing the Maryland home as his principal residence.)

In October 2020, Schiff formally designated his Maryland residence as a second home; I do not know what triggered that correction, but I’ve seen no indication in the reporting that Schiff made any misrepresentations about the Maryland property after 2013, which therefore seems to be the critical date for statute of limitations purposes, which I’ll come to. (Obviously, I have no way of knowing what Schiff represented in any state or federal tax forms, any required government disclosure forms, etc. I can weigh only what the press has reported.)

Based on an ethics complaint filed against Schiff by Christine Bish, an unsuccessful 2024 Republican House candidate from California, Schweizer reports that Schiff was asked about the conflicting claims last year in a radio interview during his Senate campaign. He replied, “Our principal residence, our primary residence, has always been in California and always will be.”

Trump’s Post and the Constitution

In his familiar understated manner, President Trump issued a social media post Tuesday:

I have always suspected Shifty Adam Schiff was a scam artist. And now I learn that Fannie Mae’s Financial Crimes Division have concluded that Adam Schiff has engaged in a sustained pattern of possible Mortgage Fraud. Adam Schiff said that his primary residence was in MARYLAND to get a cheaper mortgage and rip off America, when he must LIVE in CALIFORNIA because he was a Congressman from CALIFORNIA. I always knew Adam Schiff was a Crook. The FRAUD began with the refinance of his Maryland property on February 6, 2009, and continued through multiple transactions until the Maryland property was correctly designated as a second home on October 13, 2020. Mortgage Fraud is very serious, and CROOKED Adam Schiff (now a Senator) needs to be brought to justice.

Trump said this information came from the Financial Crimes Division of Fannie Mae, which is overseen by FHFA. Let’s put aside both that it’s most unusual for a president of the United States to have so granular a level of detail regarding a person’s mortgage transactions, and that a president who truly cares whether a suspect is “brought to justice” must refrain from publicly commenting on pending investigations. The president is wrong about a basic fact, from which everything else in his diatribe flows.

There is no legal requirement that a person must “LIVE” primarily, much less full-time, in the state for which the person is a senator or representative. The qualifications for membership in the House or Senate require that the person be an “inhabitant” of the relevant state. There are also requirements of age (25 for the House and 30 for the Senate) and time of American citizenship (seven years for the House and nine for the Senate). But these are the only requirements because they are set forth in the Constitution (Article I, Sections 2 and 3) and therefore cannot be altered by federal or state statutory law.

Inhabitancy is not synonymous with residency, much less primary residency. In fact, the Constitution says that the person need only be an inhabitant “when elected,” which means when the election takes place. Now, as a practical political matter, the people of a state would be unlikely to elect someone who is not a resident of the state; but residency is not a legal requirement.

And, contrary to the president’s implication, a person need not “LIVE” in a state at all times in order to represent the state, because the job requires significant time in Washington when Congress is in session. (The president himself lives in Palm Beach, Fla. (his primary residence), Bedminster, N.J. (his summer residence), and New York City (his former primary residence and private business headquarters), while spending what’s probably the lion’s share of his time in the White House.)

The president says that Schiff continued to maintain that the Maryland home was his primary residence for about eleven years, and then in October 2020 designated it as a “second home.” Trump adds that this was the “correct” designation, but that appears to be because he thinks that it would be illegal for a representative or senator to have a primary residence outside of the state he or she represents. That’s not the case. There is no constitutional mandate that the primary residence of a senator or representative must be in the state he or she represents.

Misrepresentations Are Not Necessarily Criminal Fraud

Now, let’s talk criminal liability. I assume that Schiff did in fact simultaneously represent two different residences, in two different states, as his primary residence, which is improper. I make that assumption because Schiff seems to have admitted a “clerical error” in 2009 (although he then repeated the “error” in 2011 and 2013), and the matter was formally corrected in 2020.

I also make this assumption because, in his defense, Schiff says the banks he was dealing with were well aware of his living situation (namely, that he was a congressman living part-time in two different places, 3,000 miles away from each other). “Everyone knew what I was doing” (which, by the way, was Trump’s defense when James sued him for making allegedly fraudulent misrepresentations about his assets) is the dodge that accused people typically use when they are not in a position to say, “I never did the thing I’m accused of” — here, “I never simultaneously represented two different homes as my primary residence.”

That said, if creditors are fully informed, it strongly suggests a lack of fraudulent intent even if the person made a technical error. (Trump was right to hammer this point in countering the James lawsuit.) Let’s set aside for a moment that Schiff’s relevant conduct is time-barred for prosecution purposes (I’m coming to that); there is a big difference between saying Schiff made misrepresentations and that Schiff is guilty of bank fraud. Again, to compare the Trump example, federal and state criminal prosecutors — including even Manhattan District Attorney Alvin Bragg — rightly declined to charge Trump criminally in connection with the extensive misrepresentations that James incorporated in her civil suit. The implication that Schiff could be looking at up to 30 years’ imprisonment — the maximum statutory penalty for bank fraud — is absurd.

Statute of Limitations

On that score, the criminal referral by FHFA to the Justice Department is peculiar. Given that FHFA and Fannie Mae deal with mortgages, one would think the agency’s chief would know that the federal statute of limitations for bank fraud is ten years.

My sense is that Pulte does know this. Although Schiff’s last misrepresentation was in 2013 and is therefore time-barred, Trump claims — based on the FHFA referral — that Schiff may have engaged in “a sustained pattern” of fraud. Prosecutors often creatively suggest “sustained patterns” of continuing crime to try to extend the statute of limitations beyond the date when the crime actually ended. Here, the idea would be that the fraudulent conduct begun in 2009 (when Schiff first claimed the Maryland home as his principal residence) should be deemed, not to have ended in 2013 (the last such claim), but to have continued until 2020, because that’s when Schiff finally corrected the record. To the contrary, the statute of limitations begins to run when the alleged crime is committed; the last misrepresentation happened in 2013, a dozen years ago, so the statute of limitations has lapsed.

I am not an expert in Maryland law, but I understand that for various felonies, there is no statute of limitations. I believe there is no chance that Maryland authorities would have any interest in charging Schiff based on twelve-year-old conduct they’d have trouble proving was criminally fraudulent.

In any event, the FHFA referral is to the Justice Department for purposes of federal prosecution. There appears to be no prosecutable federal case.