On Friday, outlining what we know about the two-count bank fraud indictment the Trump Justice Department filed against New York Attorney General Letitia James, I offered three cautionary notes, discordant with claims by Trump partisans that the case against is a lock.

First, the prosecution’s case never sounds better than when the charges are first announced by the government, when the defense hasn’t yet probed them for weaknesses. Second, we have not yet heard a substantive response from the James camp, led by Abbe Lowell, the veteran Washington defense lawyer — who has already once refuted similar allegations posited by the Trump administration. Third, Erik Siebert, the experienced prosecutor who had sat with the case longest, declined to charge it. Along with Siebert’s similar refusal to charge what looks like a weak case against former FBI Director James Comey, the James declination prompted President Trump to fire him as interim U.S. attorney for the Eastern District of Virginia (EDVa).

We still haven’t heard from Lowell, but already there are reasons to question whether Trump-camp confidence that the James case is a slam-dunk are well founded.

First, it turns out that two EDVa grand juries heard the government’s presentation of evidence against James, one in Norfolk, and the other in Alexandria where the indictment was filed. The prosecution centers on a home, described in the indictment as the “Perrone property” (the name of its street), which is in Norfolk. So why two grand juries? Why start in Norfolk, where the alleged crime happened, but then ask for an indictment from grand jurors in Alexandria?

Well, it could just be logistics. The Wall Street Journal reports that Lindsey Halligan, the inexperienced prosecutor Trump installed in Siebert’s stead, was in a rush to get the James indictment done. Apparently, the Norfolk grand jury was not available this week, while the Alexandria grand jury was. Both are divisions of the EDVa; grand juries in either can be used for offenses within the district, though the usual practice is to indict in the division where the crime took place.

Maybe Halligan was in a rush because of pressure from President Trump. But it’s still odd. Fraud crimes against financial institutions are rare exceptions to the usual five-year statute of limitations; they have a ten-year period, so there was no time pressure. Plus, reporting indicates that Halligan is considering adding more charges (notwithstanding her experienced predecessor’s conclusion that there was no viable case against James). Why not wait until the whole case is ready to go before indicting?

Another possibility is more troubling. In June, the New York Times reports, Siebert’s EDVa prosecutors called a witness before the Norfolk grand jury, James’s niece, Nakia Thompson. She reportedly provided at least some exculpatory evidence. When Halligan shifted to Alexandria last week, Thompson was not called to testify before the grand jury voted to indict.

This is not necessarily nefarious. Thompson’s testimony would have been transcribed and could have been presented to the Alexandria grand jury in that form, without the need to re-call her to appear in person. Less appropriately but still lawfully, Halligan could have had an agent witness summarize Thompson’s testimony (especially if the transcript was made available for the Alexandria grand jurors if they wished to read it). Because grand-jury proceedings are secret, we do not know what happened. Under federal grand-jury law, prosecutors may and usually do proceed by hearsay. And they are not required to present exculpatory evidence. (The point of the constitutional requirement of a grand-jury indictment is to ensure that there is enough evidence of wrongdoing to warrant a trial; not to try the case or present the defense’s side of the story).

That said, it’s not that unusual for prosecutors often present exculpatory evidence in the grand jury. And it would be highly unusual, to say the least, to change grand juries in midstream with the result that exculpatory testimony presented to an initial grand jury was not presented to the final grand jury that approved the indictment. Obviously, Abbe Lowell and James’s defense will seek to explore whether that happened.

Now, let’s get to the substance of Thompson’s testimony. As background, recall that the Trump DOJ alleges that, to get a more favorable interest rate, James falsely claimed that she’d be living part-time in the modest Norfolk home on Perrone Avenue, under a mortgage agreement that did not permit her to rent the place. The government alleges that, instead, James rented the home out and did not occupy it at all.

According to the Times report, however, Thompson says she testified that she and her two children have lived in the home since her aunt, James, purchased it in August 2020, and that James has not charged her rent. Thompson also maintains that James has come to stay in the home a few times a year — to visit with Thompson’s family, including Thompson’s mother (James’s sister) who lives in another modest Norfolk home owned by James.

There’s more.

As I noted in the above-linked column, former U.S. attorney Siebert’s team reportedly had concerns about the vagueness of Fannie Mae’s definitions of what a second home is, versus an investment property.  Even without having heard from Lowell, we’re starting to learn why that’s significant.

A second home, the Times report explains, is one the buyer must occupy for “some portion of the year” and not make a rental property. Obviously, if Thompson’s testimony has been accurately reported, that would support a defense claim that James, in fact, complied with the original mortgage terms. (I italicized “original” because, although the indictment fails to mention it, the mortgage terms were apparently amended. I’ll come to that momentarily.)

The Thompson testimony would certainly complicate things for the government. James wouldn’t necessarily be out of the woods, though. To begin with, the indictment alleges that James declared rental income (and took maintenance deductions) on the Perrone property, although it doesn’t say in what year that happened (the year, as we’ll see, could be important). Further, the Times notes that in the annual financial disclosure James must file as New York’s AG, she acknowledged having made between $1,000 and $5,000 in income on the Perrone property in 2020, but not in any other year. That could support the government’s claim that she improperly used the home (or some part of it) as a rental. (No doubt, she would counter that if she were the kind of person who would defraud a bank – out of a miniscule amount of money I’ve estimated to be about $50 per month – she would not have revealed the rental income on her disclosure statement.)

There are questions, then, about: (a) whether Thompson paid rent to James despite saying she didn’t, (b) whether someone other than Thompson paid rent to James, or (c) whether James’s disclosure form is inaccurate.

On that last point, the Times adds that on her AG disclosure forms (which are not referenced in the indictment), James listed the Perrone property as an “investment property” from the time she bought it through last year. But this year, when she knew she was under investigation by the Trump administration, she suddenly stopped listing it as such. Why she changed this designation is not yet clear. Under Fannie Mae’s definitions, such properties are owned but not occupied by the borrower.

Now, let’s get to the mortgage amendment.

The indictment states that the original August 2020 mortgage agreement was made with OVM Financial, and that the agreement was acquired by First Savings Bank (headquartered in Jeffersonville, Ind.) in March 2021. But, to repeat, the indictment doesn’t reveal that the original rental agreement was amended. The Times says its reporters have seen the amendment documents and consulted experts in real estate law about them.

The Times report neither reproduces the documents nor tells us whether the amendment had anything to do with transfer of the mortgage loan from OVM Financial to First Savings Bank. It does, however, provide two details that seem to be important. First, the amendment allowed James to use the home as a “second home” — i.e., she would occupy it sometimes, but was also permitted to rent it for short, occasional durations. Second, a year after the deed for the Perrone property was signed — i.e., by approximately August 2021 — the Times says, “James had wider latitude to use the property as she wished, according to the document and the experts.”

Let’s summarize. The indictment suggests that James was prohibited from renting out the home through the life of the loan (the five years from August 2020 through the present). Yet, between Thompson’s testimony and the documents on which the Times reports, James can be expected to counter that: (a) she initially did not rent the home to her niece’s family and occasionally occupied it while visiting, which complied with the original loan terms; (b) she charged a minor amount of rent at one point under the belief that the amendment of the loan agreement gave her latitude to do that; and (c) she declared rental income on her taxes and in her financial disclosure statement because she had no reason to believe she had done anything wrong.

We will see how all this shakes out. Again, Halligan’s prosecutors are likely to have pushback on these points, and we haven’t even heard yet what Lowell may say about other documents and evidence he may have compiled to refute the charges.

I will just leave you with this: It is the government’s burden to prove fraudulent intent beyond a reasonable doubt on these serious felony charges, in this case involving a negligible amount of money normally too unserious to be the subject of a federal fraud prosecution. I suspect that, despite heavy pressure from President Trump to file charges, Erik Siebert concluded that Letitia James would be able to sow a good deal of doubt.