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Federal Reserve Governor Lisa Cook is under investigation by the U.S. Department of Justice (DOJ) over allegations that she misrepresented the occupancy of three properties to obtain more favorable mortgage terms.
The DOJ has issued subpoenas seeking information related to mortgage fraud claims, according to officials cited by The Wall Street Journal.
The investigation originated from two criminal referrals sent by Federal Housing Finance Agency (FHFA) Director Bill Pulte to Attorney General Pam Bondi. These referrals prompted President Donald Trump to attempt to dismiss Cook “for cause” on Aug. 25.
Pulte alleges that in 2021, Cook purchased homes in Michigan and Georgia but claimed they would serve as primary residences in order to qualify for lower interest rates and reduced down payments, when in fact they were intended as investment properties.
A second referral centers on a $361,000, 15-year loan Cook obtained in April 2021 to buy a Massachusetts condominium, which she listed as a second home. Pulte contends she later reported rental income from the property, suggesting it was being used as an investment.
Cook responded by filing a lawsuit on Aug. 28 in federal court in Washington, D.C., naming Fed Chair Jerome Powell and the Board of Governors as defendants since they would be responsible for carrying out a dismissal.
In the suit, Cook — a Biden-era appointee — argues her removal would “subvert the Federal Reserve Act,” which requires a clear showing of cause to remove a governor.
Her attorney, Abbe David Lowell, wrote in the filing that the attempt is based on “unsubstantiated” allegations about private mortgage applications submitted by Governor Cook prior to her Senate confirmation.
