The US justice department has initiated a criminal investigation into mortgage fraud claims against Federal Reserve governor Lisa Cook, according to new reports, as a lawsuit she filed against Donald Trump over her firing makes its way through court.
Lawyers with the justice department have issued subpoenas for the investigation, according to the Wall Street Journal.
Last month, Trump moved to fire Cook over unconfirmed claims that she listed two properties as her primary residence. Bill Pulte, the director of the Federal Housing and Finance Agency and a close ally of Trump, alleged Cook had lied on bank documents and records to obtain a better mortgage rate.
Cook, a voting member of the Fed board that sets interest rates, said she has “no intention of being bullied to step down” and that she would “take any questions about my financial history seriously”.
In response to Trump’s bid to dismiss her, Cook filed a lawsuit against the president arguing that her removal was unconstitutional and threatened the independence of the Fed. Cook’s lawyers say the firing was “unprecedented and illegal” and that federal law requires showing “cause” for a Fed governor’s removal.
“An unsubstantiated allegation about private mortgage applications submitted by Governor Cook prior to her Senate confirmation is not [cause],” her lawyers said in court documents.
In court documents, lawyers for Cook suggested that a “clerical error” may be behind the discrepancies found in her mortgage records.
Cook was appointed by Joe Biden in 2022 for a 14-year term on the board that was set to end in 2038. She is the first Black woman to be appointed to the board.
US district court judge Jia Cobb heard arguments for the lawsuit last week and said she will expedite the case, which is ultimately expected to be taken up by the US supreme court.
Trump’s attacks against Cook come against the backdrop of a long fight the White House has waged against the Fed, which has historically been treated as nonpartisan.
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Earlier in the year, Trump threatened to fire the Fed chair, Jerome Powell, for not lowering interest rates, but ultimately walked back his threats after negative responses from investors. Trump also tried to accuse Powell of fraud over renovations at the Fed’s headquarters, which have cost more than anticipated.
Abbe Lowell, Cook’s lawyer, told the Journal that “it takes nothing for this DoJ to undertake a new politicized investigation”. The justice department did not immediately respond to the Guardian’s request for comment.
This is the third mortgage fraud inquiry the justice department has launched against Democrats and Democratic-appointed officials. Experts have called the pattern a type of “lawfare” as Trump and his allies use their roles to take down other officials.
Last month, the US attorney general, Pam Bondi, appointed a special attorney to investigate similar mortgage fraud allegations the White House has levied against California senator Adam Schiff and the New York attorney general, Letitia James.
