Trump's motivation for accusing Adam Schiff of fraud is clear. But the legal case is not

San Francisco Chronicle​

a day ago

Sen. Adam Schiff has been on President Donald Trump's hit list for many years — an outspoken critic with a role in both of Trump's impeachments — so it came as no surprise when the president announced a criminal investigation into Schiff's financial transactions.
What is far less clear is whether the California Democrat stepped over any legal lines when he bought two homes, on opposite coasts, and listed both of them for a number of years as his 'principal residence,' with potential benefits in mortgage rates and taxes.
In 2003, three years after his election to the House of Representatives, Schiff and his wife, Eve, purchased a home in a Maryland suburb for themselves and their two young children. Six years later, the couple bought a condominium in Schiff's House district in Burbank. It was not until 2020 that he reclassified the Maryland home as a 'secondary' residence.
Home owners can claim a tax deduction on mortgage payments for their primary residence, and Schiff says he took a deduction only on the condominium, saving $70 per year. They may also qualify for lower mortgage payments, and Schiff's office — while insisting that he has never misled his lenders — has not responded to questions on whether he sought reduced payments on either residence.
The transactions came to Trump's attention last month.
'I have always suspected Shifty Adam Schiff was a scam artist,' Trump said in a July 15 post on his Truth Social network. Now, he said, federal financial investigators have found that 'Schiff has engaged in a sustained pattern of possible mortgage fraud,' and Ed Martin — designated 'special attorney' by Trump's Justice Department after he failed to win Senate confirmation as a U.S. attorney — will look into possible criminal charges.
Schiff, unsurprisingly, called it a baseless smear, 'Donald Trump's latest attempt at political retaliation against his perceived enemies.'
And Schiff, who served 24 years in the House before his Senate election last November, has been on Trump's enemies list at least since 2019, when he played a lead role in the congressional investigation that led to Trump's first impeachment. That followed disclosures that Trump had withheld congressionally approved military aid from Ukraine to pressure the nation's president, Volodymyr Zelenskyy, to announce an investigation of Democratic candidate Joe Biden and his son Hunter.
In 2021, Schiff also took part in the investigation that resulted in Trump's impeachment by the House for helping to incite the attack on the U.S. Capitol by a mob trying to overturn the 2020 election results. The Senate acquitted Trump in both cases, as Democrats lacked the two-thirds majority needed to remove him from office.
Meanwhile, Schiff's supporters note that Trump has been silent about revelations last month that Texas Attorney General Ken Paxton, a Republican and strong supporter of the president, and his now-estranged wife had declared three separate homes in Texas as their primary residences at the same time, which reportedly made it possible for them to reduce their loan payments by hundreds of thousands of dollars.
Schiff insists he has done nothing wrong. He says he notified his lenders and mortgage companies that he and his wife listed both their homes as 'principal residences' because they lived in both places and did not use them as vacation homes or rental property. And he says he acted 'in consultation' with House legal staff.
'Big surprise — members of Congress, almost all of them, own more than one home or rent more than one home because we're required to be on both coasts,' Schiff said in a video posted online.
Federal mortgage fraud is the crime of deliberately making false statements to mislead a lender or mortgage company into approving a loan or granting other financial benefits that otherwise would have been denied.
It requires proof that the person knowingly provided misinformation about an important issue in order to deceive the lender into approving a loan or providing financial benefits. The crime is a felony punishable by up to 30 years in prison.
So did Schiff knowingly deceive his lenders? That might depend on whom you ask.
The evidence Trump has relayed to prosecutor Ken Martin contains 'very serious allegations if true, and they could potentially constitute some level of fraud,' William Jacobson, a Cornell law professor and conservative commentator, told Fox News. 'If an average citizen misrepresented mortgage documents … to get a favorable rate, I think such person would be prosecuted.'
Jacobson also criticized Schiff and other Democrats for 'cheerleading' Trump's prosecution and conviction on 34 felony charges. Trump was found guilty by a New York jury in May 2024 of concealing $130,000 in payments to former porn actress Stormy Daniels to keep her from disclosing their sexual relationship before the 2016 election. A sentencing judge imposed no criminal penalties this January, as Trump was about to return to office.
Schiff's actions drew a similar assessment from William Pulte, a former businessman appointed by Trump in January to direct the Federal Housing Finance Agency. In a 'criminal referral' to Justice Department officials in May, Pulte, citing media reports, said Schiff 'has, in multiple instances, falsified bank documents and property records to acquire more favorable loan terms.'
A different assessment came from Lawrence Jacobson, a veteran real estate lawyer in Beverly Hills who has served as an expert witness in trials on property issues.
'He has done nothing wrong,' Jacobson — no relation to the Cornell professor — told the Chronicle. 'He made full disclosure to the lenders and did it only after advice of counsel. The only crime he committed was doing his job.'
Candace Turitto, a professor of political science at the University of Maryland, said that 'technically, there's absolutely nothing wrong' with Schiff's transactions, based on the evidence so far. But she said the mortgage laws, allowing borrowers to claim benefits on only one home at a time, raise difficult legal and political issues for members of Congress from faraway states.
'It might make one ponder, where exactly is the line for a primary residence?' Turitto said. 'How much time of a year should I spend sleeping under a certain roof for it to count as primary? Must I travel across the country to go 'home' after work, while my MD or VA colleague has a 30-minute drive home?'
And it also affects congressional dialogue, she said.
Before the time of regular air travel, Turitto said, 'members of Congress would spend weekends and the like in DC. … They would socialize, break bread, talk shop in after-hours environments,' forming 'more cooperative relationships across party lines.'
These days, she observed, 'there's much less of this.'