The Justice Department has taken additional steps in its investigation into mortgage fraud allegations against Federal Reserve governor Lisa Cook, a person familiar with the matter told NBC News.
Cook has denied the allegations, according to filings this week from her legal team. Earlier on Thursday, The Wall Street Journal first reported[1] that the Justice Department had issued subpoenas focused on Cook’s properties in Ann Arbor, Michigan, and Atlanta.
“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,” Cook attorney Abbe Lowell said in a statement Thursday.
Bill Pulte, President Donald Trump’s top mortgage official and a housing industry scion, said last month that he made two criminal referrals to the Justice Department over alleged fraud he claimed Cook committed before and during her time as a Fed governor.
Ed Martin, a Justice Department official tapped to oversee probes into Cook and other top Democrats facing similar allegations, said in late August that an investigation was being opened into Cook. Martin also said that Fed Chair Jerome Powell should remove Cook, according to a copy of his letter obtained by Bloomberg.[2][3]
Powell does not have the power to remove other top Fed officials, such as Cook.
The Justice Department’s investigation is one of two legal fronts Cook is fighting. She sued Trump[4] last week after he attempted to fire her for cause, citing Pulte’s accusations.
Nominated by then-President Joe Biden, Cook is the first Black woman on the Federal Reserve’s board of governors.[5] Her term began in 2023 and runs through 2038.
Cook’s legal battles are playing out against a broader struggle over the long-held political independence of the Federal Reserve. Trump and several of his officials, including Pulte, have attacked Powell in a monthslong campaign to pressure the central bank into significantly cutting its benchmark interest rate, arguing it would stimulate the economy. A large rate cut, rather than the incremental quarter-point cut the Fed often deploys, would likely heat up already stubborn inflation, economists and other experts argue.
Powell’s term as chair is set to expire in May 2026. Trump and Treasury Secretary Scott Bessent are reviewing candidates to succeed him.
This is a developing story. Please check back for updates.
References
- ^ The Wall Street Journal first reported (www.wsj.com)
- ^ other top Democrats facing similar allegations (www.nbcnews.com)
- ^ his letter obtained by Bloomberg. (www.bloomberg.com)
- ^ She sued Trump (www.nbcnews.com)
- ^ Cook is the first Black woman on the Federal Reserve’s board of governors. (www.nbcnews.com)
- ^ Steve Kopack (www.nbcnews.com)
- ^ Ryan J. Reilly (www.nbcnews.com)