Justice Department probes mortgage fraud claims against Lisa Cook of Federal Reserve, AP source says

Federal Reserve Board of Governors member Lisa Cook listens during a meeting at the Federal Reserve in Washington on June 25, 2025. (Mark Schiefelbein / AP Photo)

WASHINGTON — The Justice Department has begun examining mortgage fraud allegations against Lisa Cook, the Federal Reserve governor who is challenging a Trump administration effort to remove her from her job and erode the central bank’s independence.

Investigators have issued subpoenas as part of an inquiry into Cook, spawned by a criminal referral from the country’s top housing regulator, according to a person familiar with the matter who was not authorized to discuss the probe and spoke on condition of anonymity to The Associated Press.

A Justice Department spokesperson declined to comment on the inquiry, which was earlier reported by The Wall Street Journal.

“Predictably and recognizing the flaws in challenging their illegal firing of Governor Cook, the administration is scrambling to invent new justifications for its overreach. This Justice Department — perhaps the most politicized in American history — will do whatever President Trump demands,” Cook’s lawyer, Abbe David Lowell, said in a statement.

News of the investigation comes amid a high-stakes legal fight over U.S. President Donald Trump’s removal last month of Cook, an action she says is being undertaken so that he can seize control of the independent central bank.

Trump said he was firing Cook on Aug. 25 after one of his appointees alleged that she committed mortgage fraud related to two properties she purchased in 2021, before she joined the Fed. Cook is accused of falsely listing two properties as “primary residences.” Down payment requirements are often more lenient and mortgage rates are lower for primary residences versus a second home or investment property.

The Justice Department probe is centered on the two properties in Atlanta and Ann Arbor highlighted by Bill Pulte, who made the criminal referrals in his capacity as director of the Federal Housing Finance Authority, according to the person familiar with the matter. The work is being coordinated by Ed Martin, the director of the Justice Department’s Weaponization Working Group, who is also spearheading other investigations into perceived Trump adversaries.

Cook’s lawyers have adamantly denied any wrongdoing on her behalf.

“The questions over how Governor Cook described her properties from time to time, which we have started to address in the pending case and will continue to do so, are not fraud, but it takes nothing for this DOJ to undertake a new politicized investigation, and they appear to have just done it again,” Lowell said.

___

Eric Tucker and Paul Wiseman, The Associated Press