Justice Department Opens New Probe With Multiple Legal Challenges And Controversies Surrounding Prosecutorial Authority
Monday, January 12, 2026, 11:00 A.M. ET. 3 Minute Read, By Jennifer Hodges, Political Editor: Englebrook Independent News,
ALBANY, NY.- Federal prosecutors have initiated a new criminal investigation into New York Attorney General Letitia James, focusing on financial transactions linked to her campaign and personal associates, marking the latest legal and political clash involving one of President Trump’s most prominent Democratic adversaries.
The inquiry, reported by major national outlets, is in its early stages and centers on financial dealings between James and Iyesata Marsh, her longtime hairdresser. Prosecutors are seeking interviews and records related to those transactions as potential evidence of unlawful conduct. James has not been formally charged with any crime in this latest inquiry.
Background: Previous Legal Battles And Indictment Attempts;
This new investigation follows several earlier legal efforts by federal authorities to pursue criminal charges against James over alleged mortgage and financial misconduct.
In October 2025, a federal grand jury in the Eastern District of Virginia indicted James on bank fraud and false statement charges, alleging she misrepresented information to secure favorable mortgage terms on a property. James pleaded not guilty.
That case was dismissed in November 2025 after a federal judge ruled the prosecutor who secured the indictment was unlawfully appointed, undermining the legitimacy of the proceedings.
Federal prosecutors attempted to re-indict James, but two separate grand juries declined to bring new charges in December 2025, a rare but significant procedural rejection.
Legal Turmoil Over Prosecutorial Authority;
Adding to the controversy, U.S. District Judge Lorna G. Schofield in New York disqualified Acting U.S. Attorney John Sarcone from overseeing any investigations involving James.
The court ruled that Sarcone was not lawfully serving in his role because his term exceeded the 120-day statutory limit without Senate confirmation. As a result, the subpoenas he had issued related to James and her office were quashed.
In her ruling, Judge Schofield sharply criticized the Justice Department’s administrative maneuvering, stating that it violated federal appointment law and undermined the integrity of the legal process.
Similar interim-prosecutor disqualifications have occurred in New Jersey, Nevada, and California, highlighting a growing federal controversy over temporary prosecutorial authority nationwide.
Responses From Parties Involved;
Letitia James and her legal team have categorically denied wrongdoing, calling the federal investigations politically motivated.
Her attorney, Abbe Lowell, said the renewed probe reflects what he described as “the desperation of those working for President Trump,” a charge echoed in previous statements after her Virginia indictment was dismissed.
James maintains that the investigations are retaliation for her high-profile civil litigation against President Trump and other corporate defendants.
The U.S. Department of Justice, meanwhile, insists the investigations are legitimate and says it plans to re-issue subpoenas through properly appointed prosecutors to continue gathering evidence.
Broader Political And Legal Context;
James has become one of the most powerful legal figures in Democratic politics after securing historic civil judgments against Donald Trump and Trump-related businesses, a role that has made her both a national figure and a political target.
Supporters say the investigations reflect weaponization of federal law enforcement, while critics argue they show that no public official is above scrutiny.
Regardless, the new criminal inquiry places James once again at the center of a rapidly escalating national legal battle between federal prosecutors and one of America’s most prominent state-level law enforcement officials.
Editor’s Note:
This article was verified using reporting from Reuters, CBS News, The Associated Press, and publicly available federal court records. All facts were cross-checked against multiple reputable sources. Letitia James is presumed innocent unless proven guilty in a court of law. Her office was contacted for comment. Verified by Jennifer Hodges and Art Fletcher, Englebrook Independent News.
