The Justice Department has officially started a criminal investigation into Federal Reserve Board Governor Lisa Cook. Officials want to find out if she gave false information on mortgage applications, Fox News reports.
This investigation comes just days after Cook filed a lawsuit challenging President Donald Trump’s attempt to remove her from the Federal Reserve, the central bank responsible for guiding the U.S. economy.
The news could make her legal fight to stay on the Fed board more complicated and may delay a decision from U.S. District Judge Jia Cobb. Last week, Judge Cobb called both sides to court for a hearing on the matter.
The fraud accusations Trump used to try to fire Cook were first made by Bill Pulte, a Trump appointee to the Federal Housing Finance Agency. This agency oversees Fannie Mae and Freddie Mac.
Pulte sent two separate referrals to the Justice Department about three mortgages Cook had before joining the Fed. These loans were for properties in Michigan, Georgia, and Massachusetts. Authorities are looking into whether Cook misrepresented how she would use the homes. Trump cited these claims in his effort to remove her as a Fed governor.
In a supplemental memo filed Thursday, Justice Department lawyers did not directly address the new investigation. They restated that Trump has the authority to remove a Fed board member “for cause.” They also argued that even if the alleged actions happened before Cook was confirmed by the Senate, she hasn’t proven that the Senate knew about them and approved her anyway.
The DOJ investigation could make Cook’s fight to remain on the Fed board more difficult.
Cook’s lawyers told the court Friday that there was no formal Justice Department investigation before Trump tried to fire her. Her attorney, Abbe Lowell, said Pulte’s complaints were just a “pretext” for Trump to gain a majority on the Fed board. Judge Cobb said that argument made her “uncomfortable.”
Cook’s lawsuit, filed last month, did not explain the allegations or why she listed two houses as her primary residence on mortgage documents. In a new court filing this week, Lowell said Cook “did not ever commit mortgage fraud.”
Cook’s lawyers argued with federal attorneys about whether Trump had enough “cause” to remove her. Lowell pointed out that there was no “investigation or charge” before Trump announced her removal. He also said the administration gave Cook only 30 minutes to respond to the mortgage fraud claims, calling it an attempt to “litigate by tweet.”
Judge Cobb said the case raises “important questions” about the Federal Reserve. She agreed to extend a filing deadline for both sides and is expected to issue a decision soon.
It is unclear how the DOJ investigation will affect Cook’s lawsuit or her request for court protection.
The White House referred questions to the Department of Justice. The Federal Reserve declined to comment. Cook’s lawyers did not immediately respond to Fox News Digital’s request for comment.
Before Cook filed her lawsuit, a Fed spokesperson said in an Aug. 26 statement that the Fed will “abide by any court decision.”
