(CNN) — A Trump administration housing official has sent a new criminal referral to the Justice Department against Federal Reserve Governor Lisa Cook, as she sues the administration to fight the president’s efforts to fire her.
The new criminal referral, made late Thursday and revealed in a social media post by Federal Housing Finance Agency director Bill Pulte, alleges Cook identified a property in Cambridge, Massachusetts, as a second home on official documents, but instead used it as an investment property.
Cook, the first Black woman to serve as a Fed governor, has filed a lawsuit challenging President Donald Trump’s firing of her earlier this week. A hearing on that suit took place Friday morning.
The battle over Cook’s job is about more than one position: The nation’s central bank operates independently so that officials can make economic decisions without pressure over political considerations. Trump’s attempts to fire Cook – and to force the bank to cut interest rates – get to the heart of the question about the Fed’s independence and whether Trump’s presidential powers have limits.
The Fed has been resistant to cutting rates this year, citing Trump’s tariffs and their potential to raise inflation. Trump, however, has repeatedly demanded lower borrowing costs, often lobbing personal insults in the process.
Cook has not been charged with any crimes.
At the Friday hearing on her civil suit, her attorney, Abbe Lowell argued the mortgage fraud allegations are a pretext because of Trump’s political ire with the Fed for not lowering interest rates.
In a statement to CNN, Lowell denied there was any validity to the allegations against his client.
“This is an obvious smear campaign aimed at discrediting Gov. Cook by a political operative who has taken to social media more than 30 times in the last two days and demanded her removal before any review of the facts or evidence,” Lowell said in the statement. “Nothing in these vague, unsubstantiated allegations has any relevance to Gov. Cook’s role at the Federal Reserve, and they in no way justify her removal from the board.”
In court Friday in Cook’s civil case, the Justice Department didn’t acknowledge any criminal investigation it may be conducting.
But lawyers for the department have argued to a judge weighing the legality of her firing that “a Governor’s failure to carefully read her own financial documents casts a shadow over the Federal Reserve’s decisions,” according to a Justice Department court filing this week.
Still, the Justice Department has tasked Ed Martin—whom the attorney general is using as a special investigator for a smattering of politically charged allegations that President Donald Trump is interested in—to look into the allegations around Cook, according to a person familiar with the investigation.
Many of Trump’s attacks on the Fed have been focused on Fed Chair Jerome Powell, whom he appointed during his first term in office, and who was reappointed to another term under President Joe Biden.
Trump has not tried to remove Powell, despite threats that he might do so. Some of those threats prompted a sell-off in US equity markets by investors concerned about Fed independence. The president does not have the power to remove a member of the Fed Board except “for cause,” not just because of a disagreement over monetary policy. But Trump used the allegations of mortgage fraud against Cook as justification for her removal.
In the Thursday referral to the DOJ, Pulte described the new allegations as “extremely troubling.”
“Second homes receive lower mortgage costs than investment properties, because investment properties are inherently riskier,” he wrote.
The FHFA had already made a criminal referral alleging that Cook committed mortgage fraud by getting mortgages for two different properties, one in Michigan, another in Georgia, and claiming on both mortgages that they would be her primary residence.
This story has been updated with additional reporting and context.
– CNN’s Jeremy Herb, Phil Mattingly and Evan Perez contributed to this report.