The Department of Justice (DOJ) has reportedly opened a criminal investigation into Federal Reserve board of governors member Lisa Cook over alleged mortgage fraud.
The probe, reported by several outlets Thursday, follows two criminal referrals by Federal Housing Finance Agency Director Bill Pulte that claimed Cook submitted false information in her mortgage application, possibly to secure lower interest rates.
President Trump pointed to those allegations as reason to fire her from the central bank, a move that threw into question the institution’s historical independence from political influence. Cook has sued over Trump’s attempt to remove her from her post.
The Wall Street Journal first reported on the probe, citing U.S. officials familiar with the matter. Subpoenas have been issued and grand juries are being used as part of the investigation, the Journal reported.
A Justice Department spokesperson said the agency “does not comment on current or prospective litigation including matters that may be an investigation.”
Cook’s lawyer, Abbe Lowell, said in a statement that the reported probe shows the administration is “scrambling to invent new justifications for its overreach” in seeking her removal. He said that the ways Cook described her properties “are not fraud” and accused the Justice Department of undertaking a “politicized” investigation.
“This Justice Department – perhaps the most politicized in American history – will do whatever President Trump demands,” Lowell said. “He wants cover, and they are providing it.
In court filings Wednesday, Lowell doubled down that Cook “did not ever commit mortgage fraud.”
The Justice Department is also investigating New York Attorney General Letitia James and Sen. Adam Schiff (D-Calif.) over their mortgage records. Ed Martin, a Justice Department official, is investigating the cases as a “Special Attorney addressing mortgage fraud by public officials.” The Hill reached out for comment.
The DOJ has asserted in court papers that making contradictory statements in financial documents is “more than sufficient ground” to remove a senior financial officer, even if no criminal burden of proof could be sustained.
Pulte claimed in an Aug. 15 criminal referral that, weeks apart in 2021, Cook wrote in mortgage documents for properties in Michigan and Georgia that each was her principal residence. He said he claimed in a second criminal referral that she represented a third property as her “second home,” despite referencing it in other government documents as an investment or rental property.
The Fed’s next meeting is Sept. 16. Cook has asked the court to block Trump’s firing from going into effect and bar other Fed governors from helping effectuate it to preserve the status quo as the lawsuit progresses.
The Justice Department has asked for a ruling by Sept. 9, so appellate relief could be sought before the meeting.