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Sen. Adam Schiff faces potential federal prosecution for mortgage fraud after being referred to the Justice Department by the Federal Housing Finance Agency. The California Democrat is accused of falsifying bank documents and property records between 2013-2019 by claiming his Maryland home as a primary residence to secure lower mortgage rates, while simultaneously claiming a California property as his primary residence for tax benefits.
The allegations center on a $610,000 Fannie Mae-backed mortgage the Schiffs obtained in 2003 for their $870,000 Potomac, Maryland home at a 5.625% interest rate. This favorable rate was contingent on the property being their primary residence. However, since Sen. Schiff represented California in Congress during this period, his legal primary residence should have been in California. The arrangement allegedly saved the family money through reduced mortgage payments while also allowing Sen. Schiff to claim a $7,000 tax exemption on his Burbank, California condo.
FHFA Director William Pulte’s May referral letter to Attorney General Pam Bondi outlined potential charges, including wire fraud, mail fraud, bank fraud, and false statements to financial institutions. The letter noted that the Schiffs didn’t list Maryland as a secondary residence until 2020, years after the alleged violations occurred.
Financial crimes experts suggest this type of mortgage fraud case is typically straightforward, with most defendants pleading guilty due to the clear documentary evidence. The penalties would likely include fines, restitution calculated based on interest savings, and possible additional sanctions. However, experts anticipate the Trump Justice Department may pursue more aggressive prosecution given Sen. Schiff’s role as a prominent Trump critic who led the first House impeachment inquiry in 2019.
Sen. Schiff’s office has denied wrongdoing, claiming both lenders were aware of his intent to use both properties year-round and that neither was a vacation home. The case represents a dramatic reversal for Schiff, who previously championed Mr. Trump’s prosecution on business fraud charges and celebrated President Trump’s 34 felony convictions by repeating “guilty” 34 times in Congress.
Legal experts note the irony that Sen. Schiff faces charges for falsifying records – the same crime that resulted in President Trump’s New York conviction. The case highlights questions about prosecutorial consistency, with some suggesting Democratic support for Sen. Schiff appears hypocritical given their aggressive pursuit of Trump for similar technical violations.
Read more: Schiff mortgage fraud probe could end in stiff fines, penalties for senator
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