DOJ investigating Fed's Cook over mortgage fraud

The Justice Department has launched a criminal investigation of Federal Reserve Governor Lisa Cook for submitting fraudulent information on mortgage applications.

The probe comes on the heels of criminal referrals from Federal Housing Finance Agency Director Bill Pulte.

Mr. Pulte has accused Ms. Cook of misleading banks to get more favorable lending terms. He sent the Justice Department two criminal referrals last month regarding properties in Georgia and Michigan and one in Massachusetts.

The first referral flagged mortgage documents from 2021 that listed properties in Michigan and Georgia as primary residences. The Georgia property was later put up for rent.

In his second referral, he alleges Ms. Cook took out a 15-year loan on a condo in Cambridge and listed it as a second home, but months later, she documented rental income from the property and described it as a rental/investment property.

“3 strikes and you’re out,” Mr. Pulte wrote on X last month.

Subpoenas have been issued and grand juries have been used as part of the probe, the Wall Street Journal first reported.

President Trump moved to fire Ms. Cook, a Biden appointee, but she has sued to keep her job, saying the president simply wants to shape the Fed board to his liking.

“This is an obvious smear campaign aimed at discrediting Gov. Cook by a political operative who has taken to social media more than 30 times in the last two days and demanded her removal before any review of the facts or evidence,” Ms. Cook’s lawyer, Abbe Lowell, said in a statement last month about the second referral. “Nothing in these vague, unsubstantiated allegations has any relevance to Gov Cook’s role at the Federal Reserve, and they in no way justify her removal from the Board.”

Ms. Cook is still in her role after seeking a temporary restraining order to keep her job until the court weighs the validity of her dismissal.

If she gave up her position, it would give the White House a majority on the Fed board, which would allow for easier talks over lowering interest rates.

Mr. Trump has railed against Fed Chair Jerome Powell for not lowering rates, nicknaming him “Too Late.”

Mr. Pulte had planned to hold a press conference Thursday to share new info that he said would cause “a lot of people apologizing and retracting their false and defamatory statements.”

He canceled the press conference, writing on social media: “Out of respect for the process, I will be delaying this press conference.”

He has also criticized Mr. Powell for staying silent on the matter, saying that his “legacy will be his condoning of Lisa Cook.”

• Thomas Howell Jr. contributed to this report.