Days after Lisa Cook challenged Trump, US Justice Dept opens fraud probe against Fed governor

Amid the brewing tensions between US President Donald Trump and the country’s Federal Reserve, the US Department of Justice has opened a fraud investigation into the American central bank’s governor, Lisa Cook. The probe was initiated over claims propagated by Trump himself that she falsified a mortgage application.

The accusation was first investigated by Ed Martin, a hyperpartisan Trump loyalist with little prosecutorial experience. In the past, Martin stated that it was legitimate for federal officials to publicly air criminal investigations into people targeted by the president, even if the probe did not result in a conviction.

Sources familiar with the matter told The New York Times that while the DoJ has initiated the investigation, it is not clear which US attorney’s offices will be involved in the probe.

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In the previous disclosures, Cook maintained that she had owned homes in Georgia, Massachusetts and Michigan, according to court records. One of the sources told The New York Times that federal prosecutors have begun issuing subpoenas to people related to the case.

The opening of the investigation comes as a little surprise since Martin, who leads the department’s vaguely defined weaponisation task force after Senate Republicans scuttled his nomination to be the permanent US attorney in the District of Columbia, signalled his intention to do so as the White House stepped up its attacks on Cook.

The tussle between Cook and the Trump administration started when Bill Pulte, the director of the Federal Housing Finance Agency, said his office had investigated the Federal Reserve Governor and found that she appeared to have falsified bank documents to obtain favourable terms on a mortgage.

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Pulte later referred the matter to the Justice Department for a criminal inquiry, before Trump announced that he would fire Cook from the central bank. Soon after Trump unleashed his wrath, Cook released a statement noting that she would not be “ bullied to step down from my position because of some questions raised in a tweet.”

However, she maintained that she would take “questions about my financial history seriously” and gather the facts. She went on to sue the Trump administration over its attempt to fire her. In a hearing last week, her lawyers maintained that her potential ouster was an illegal bid to undermine the traditional independence of the Federal Reserve.

In a separate statement on Thursday, Abbe D. Lowell, the lawyer representing Ms. Cook, said the reports suggested the Trump administration was “scrambling to invent new justifications for its overreach,” describing the Justice Department as “perhaps the most politicised” in American history.

“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 politicised investigation, and they appear to have just done it again,” Lowell maintained.

It is pertinent to note that the Trump administration, led by Pulte, has increasingly scrutinised the mortgage applications of Trump’s political adversaries to seek revenge against his enemies. Recently, the DoJ, under the leadership of Attorney General Pam Bondi, has acted on referrals from other government agencies by proceeding with mortgage fraud investigations of the New York State attorney general, Letitia James, and Senator Adam B. Schiff, two of the most prominent critics of Trump.