Justice Department probes mortgage fraud claims against Lisa Cook of Federal Reserve, AP source says

WASHINGTON (AP) — The Justice Department has begun examining mortgage fraud allegations against Lisa Cook, the Federal Reserve governor who is challenging a Trump administration effort to remove her from her job in a move she says is designed to erode the central bank's independence.

Investigators have issued subpoenas as part of an inquiry into Cook that was spawned by a criminal referral from the country's top housing regulator, according to a person familiar with the matter who was not authorized to discuss the probe and spoke on condition of anonymity to The Associated Press.

A Justice Department spokesperson declined to comment on the probe, which was earlier reported by The Wall Street Journal.

“Predictably and recognizing the flaws in challenging their illegal firing of Governor Cook, the administration is scrambling to invent new justifications for its overreach. This Justice Department — perhaps the most politicized in American history — will do whatever President Trump demands,” Cook's lawyer, Abbe David Lowell, said in a statement.

News of the investigation comes amid a high-stakes legal fight over President Donald Trump's announcement last month that he was ousting Cook, an action she has said is being undertaken so that he can seize control over a central bank that is typically shielded from political pressure and tasked with making decisions about whether to raise or lower interest rates.

Trump moved to fire Cook on Aug. 25 after one of his appointees alleged that she committed mortgage fraud related to two properties she purchased in 2021, before she joined the Fed.

Bill Pulte, who made the criminal referral in his capacity as director of the Federal Housing Finance Agency, has asserted that Cook had claimed two primary residences, in Ann Arbor, Michigan, and Atlanta, in 2021 to get better mortgage terms. Mortgage rates are often higher on second homes or those purchased to rent.

The Justice Department inquiry is centered on those two properties, according to the person familiar with the matter. It is being coordinated with U.S. Attorney offices by Ed Martin, the director of the Justice Department’s Weaponization Working Group, who is also pursuing mortgage fraud investigations into perceived Trump adversaries, including Sen. Adam Schiff of California and New York Attorney General Letitia James, both Democrats. Both have vigorously denied any wrongdoing.

Pulte dodged questions in a CNBC interview Thursday about whether he was similarly scrutinizing Ken Paxton, the Texas attorney general who is friendly with Trump and is running for Senate in his state’s Republican primary. Paxton took out mortgages on three properties that were all identified as his primary residence. He said he wouldn't comment on any specific situation that has not been made public.

Cook's lawyers have also insisted that she did not engage in 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, but it takes nothing for this DOJ to undertake a new politicized investigation, and they appear to have just done it again,” Lowell said.

Separately, on Thursday, the Justice Department urged a federal judge in Washington to allow for Cook's immediate removal while she fights to keep her job, dismissing as “baseless” Cook’s claim that the president is attempting to fire her so that he can seize control of the Federal Reserve.

Cook’s lawyers have argued that the firing was unlawful because presidents can only fire Fed governors “for cause,” which has typically meant inefficiency, neglect of duty, or malfeasance while in office. They also said she was entitled to a hearing and a chance to respond to the charges before being fired, but was not provided either. Attorneys said in the court filing that Cook never committed mortgage fraud.

The Justice Department says the president has the discretion to fire Cook for cause and that his decisions cannot be reviewed by the courts.

The case could become a turning point for the nearly 112-year-old Federal Reserve, which was designed by Congress to be insulated from day-to-day political influence. Economists prefer independent central banks because they can do unpopular things, such as lifting interest rates to combat inflation more easily than elected officials.

Trump has repeatedly attacked Fed Chair Jerome Powell and the other members of the Fed’s interest-rate setting committee for not cutting the short-term interest rate they control more quickly.

Many economists worry that if the Fed falls under the control of the White House, it will keep its key interest rate lower than justified by economic fundamentals to satisfy Trump’s demands for cheaper borrowing.

President Donald Trump listens during a meeting with Polish President Karol Nawrocki in the Oval Office of the White House, Wednesday, Sept. 3, 2025, in Washington. (AP Photo/Evan Vucci)

Norm Eisen, attorney of Lisa Cook, a governor on the Federal Reserve Board, arrives at the federal courthouse in Washington, Friday, Aug. 29, 2025. (AP Photo/Jose Luis Magana)

FILE - Board of Governors of the Federal Reserve member Lisa Cook, speaks during a conversations with leaders from organizations that include nonprofits, small businesses, manufacturing, supply chain management, the hospitality industry, and the housing and education sectors at the Federal Reserve building, Sept. 23, 2022, in Washington. (AP Photo/Manuel Balce Ceneta, File)

FILE - Federal Reserve Board of Governors member Lisa Cook listens during an open meeting of the Board of Governors at the Federal Reserve, June 25, 2025, in Washington. (AP Photo/Mark Schiefelbein, File)

KAMPALA, Uganda (AP) — Vote counting was underway Friday in Uganda’s tense presidential election, which was held a day earlier amid an internet shutdown, voting delays and complaints by an opposition leader who said some of his polling agents had been detained by the authorities.

Opposition leader Bobi Wine said Thursday he was unable to leave his house and that his polling agents in rural areas were abducted before voting started, undermining his efforts to prevent electoral offenses such as ballot stuffing.

Wine is hoping to end President Yoweri Museveni's four-decade rule in an election during which the military was deployed and heavy security was posted outside his house near Kampala, the Ugandan capital, after the vote.

The musician-turned-politician wrote on X on Thursday that a senior party official in charge of the western region had been arrested, adding there was “massive ballot stuffing everywhere.”

Rural Uganda, especially the western part of the country, is a ruling-party stronghold, and the opposition would be disadvantaged by not having polling agents present during vote counting.

To try to improve his chances of winning, Wine had urged his supporters to “protect the vote” by having witnesses document alleged offenses at polling stations, in addition to deploying official polling agents.

Wine faced similar setbacks when he first ran for president five years ago. Museveni took 58% of the vote, while Wine got 35%, according to official results. Wine said at the time that the election had been rigged in favor of Museveni, who has spoken disparagingly of his rival.

Museveni, after voting on Thursday, said the opposition had infiltrated the 2021 election and defended the use of biometric machines as a way of securing the vote in this election.

Museveni has served the third-longest tenure of any African leader and is seeking to extend his rule into a fifth decade. The aging president’s authority has become increasingly dependent on the military, which is led by his son, Muhoozi Kainerugaba.

Uganda has not witnessed a peaceful transfer of presidential power since independence from British colonial rule six decades ago.

Voters line up to cast their ballots at a polling station, during the presidential election, in the capital, Kampala, Uganda, Thursday, Jan. 15, 2026. (AP Photo/Brian Inganga)

Election officials count ballots after the polls closed for the presidential election at a polling station in Kampala, Uganda, Thursday, Jan. 15, 2026. (AP Photo/Brian Inganga)

An election official holds up unmarked ballots during the vote count after polls closed for the presidential election, at a polling center in Kampala, Uganda, Thursday, Jan. 15, 2026. (AP Photo/Brian Inganga)

A political representative speaks as he works to observe and verify the counting of ballots after polls closed in the presidential election at a polling station in Kampala, Uganda, Thursday, Jan. 15, 2026. (AP Photo/Brian Inganga)

A supporter of leading opposition candidate Bobi Wine cheers while watching election officials count ballots, after polls closed at a polling station in Kampala, Uganda, Thursday, Jan. 15, 2026. (AP Photo/Brian Inganga)