The U.S. Justice Department has opened a criminal investigation into whether Federal Reserve Governor Lisa Cook committed mortgage fraud, escalating tensions as President Donald Trump pushes to remove her from the central bank.
Federal prosecutors have reportedly issued subpoenas seeking information related to allegations that Cook misrepresented details on mortgage applications, according to people familiar with the matter who spoke on condition of anonymity due to the ongoing nature of the probe.
Last month, Trump announced his intention to remove Cook following accusations from Federal Housing Finance Agency Director Bill Pulte, who claimed that Cook committed mortgage fraud involving properties in Michigan and Georgia. Cook has sued the administration to remain in her position, with her legal team arguing that the president lacked valid grounds for dismissal and that she never engaged in fraudulent activity.
The dispute over Cook’s tenure has quickly become a central point in Trump’s efforts to exert greater influence over the Federal Reserve, which he has repeatedly urged to lower interest rates. In her lawsuit, Cook characterized the attempted removal as a political power grab that could inflict “irreparable harm” on the U.S. economy.
Pulte alleged that Cook had falsely listed homes in Michigan and Georgia as her “primary residence” when obtaining mortgages in 2021 to qualify for more favorable loan terms. In response, Cook’s attorneys argued that any discrepancies were unintentional and did not deceive anyone or cause harm, citing the legal standard of materiality. They also suggested that clerical errors could explain the discrepancies.
On Thursday, Cook’s lawyer, Abbe Lowell, reiterated that his client had not committed fraud. “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,” Lowell said in a statement. “It takes nothing for this DOJ to undertake a new politicized investigation, and they appear to have just done it again.”
The Justice Department did not immediately respond to requests for comment regarding the investigation. Meanwhile, Trump maintains that he has sufficient cause to dismiss Cook, pointing to previous accusations of false statements on financial documents as justification for her removal.
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