Federal prosecutors launch new probe of NY AG James’ financial transactions, NYT reports

By Jan Wolfe

WASHINGTON, Jan 8 (Reuters) – Federal prosecutors have launched an inquiry into New York Attorney General Letitia James’ financial transactions with her hairdresser, the New York Times reported on Thursday, citing people with knowledge of the matter.

The investigation is the latest effort by President Donald Trump’s administration to pursue James, an elected Democrat and one of the Republican president’s top political antagonists.

The investigation is in its early stages, but prosecutors are interested in talking to the hairdresser, Iyesata Marsh, about transactions with James or her campaign, the New York Times reported.

James has not been accused of any wrongdoing, the newspaper reported.

“Like their earlier attempts, this attack on Ms. James is doomed to fail,” her lawyer, Abbe Lowell, said in a statement. “The desperation of those working for Trump is palpable and makes indelible the stain already put on this Justice Department.”

Marsh was indicted last month on an identity theft charge in connection with the purchase of a Land Rover vehicle from a Florida dealership. The indictment, brought in federal court in Louisiana, did not mention James.

Keith Whiddon, Marsh’s lawyer in that case, declined to comment on the New York Times report.

James separately faced federal charges in Virginia that accused her of providing misleading information on mortgage documents.

That case was dismissed after a judge found the U.S. Attorney who secured the indictment, Lindsey Halligan, was unlawfully appointed. Prosecutors are appealing the ruling after two grand juries rejected attempts to revive the charges.

James has argued the investigations are payback for suing Trump’s family business.

James brought a civil fraud case against Trump in 2022, which resulted in a $355 million judgment against him after a judge found he fraudulently overstated his net worth to dupe lenders as he built his real estate empire. A state appeals court voided that penalty last year while preserving the fraud finding.

The Justice Department opened an investigation last year into whether the case brought by James deprived Trump and others of their civil rights. A federal judge on Thursday ruled that the Trump-allied prosecutor leading that investigation, John Sarcone, was unlawfully serving as the top federal prosecutor in Albany, New York, and blocked his involvement in the probe.

(Reporting by Jan Wolfe, Andrew Goudsward, and Jasper Ward in Washington, editing by Bhargav Acharya, Chizu Nomiyama, Rod Nickel)