The Justice Department has opened an early-stage criminal inquiry into New York Attorney General Letitia James focused on financial transactions with her longtime hairdresser, Iyesata Marsh. Prosecutors are reportedly examining loans and money transfers between the two, though no charges have been announced. The probe follows an earlier indictment that was dismissed after a judge found the U.S. attorney who secured it had been unlawfully appointed. Marsh faces separate bank fraud and identity-theft charges tied to a 2019 vehicle purchase.
DOJ Opens New Criminal Inquiry Into Letitia James Over Financial Ties With Hairdresser
Letitia James, New York's attorney general, speaks outside federal court in Norfolk, Virginia, on Friday, Oct. 24, 2025. / Credit: Eric Lee / Bloomberg via Getty Images
Federal prosecutors have opened a new, early-stage criminal inquiry into New York Attorney General Letitia James focused on financial transactions between James and her long-time hairdresser, Iyesata Marsh, sources told CBS News. The probe, first reported by The New York Times, comes after earlier, separate efforts to indict James failed.
The investigation is said to examine loans and other money transfers between James and Marsh. Prosecutors have asked questions about funds James reportedly loaned to Marsh over several years, though CBS News said it could not immediately determine what specific crimes, if any, are being investigated.
Marsh was indicted last month in the Western District of Louisiana on charges of bank fraud and aggravated identity theft related to a 2019 purchase of a Land Rover. Marsh's lawyer, Keith Whiddon, declined to comment.
Background: Prior Indictment And Staffing Questions
Last fall, a grand jury in the Eastern District of Virginia returned an indictment accusing James of defrauding a financial institution to obtain a more favorable interest rate on a property she purchased in Norfolk. That case was dismissed in November after a federal judge ruled that the U.S. attorney who secured the indictment, Lindsey Halligan, was unlawfully appointed. The Justice Department later sought to revive the prosecution but twice failed to secure new indictments and has appealed the ruling that disqualified Halligan.
The new inquiry is being led jointly by the U.S. Attorney's Offices for the Western District of Louisiana and the Northern District of New York, according to sources. John Sarcone, the acting U.S. attorney for the Northern District of New York, had been overseeing this and two other investigations involving James: one into her office's handling of the civil fraud case against former President Donald Trump, and another tied to litigation against the National Rifle Association and its executives.
However, Sarcone's authority to serve as acting U.S. attorney was recently challenged in court. A federal judge disqualified him from that role, finding he was not lawfully serving as acting U.S. attorney; the judge also quashed subpoenas James had received in connection with those probes. That ruling casts uncertainty over Sarcone's continued involvement in related investigations.
Statement from Abbe Lowell, James' Attorney
"Clearly frustrated by the string of failures in carrying out President Trump's political vendetta against Attorney General James, his obedient Justice Department appears to be using its vast resources to try to shake down people based on their association with Ms. James. Like their earlier attempts, this attack on Ms. James is doomed to fail," Lowell said in a statement to CBS News.
The investigation is in its early stages, and officials have not announced any charges against James in the current inquiry. Reporters will continue to monitor court filings and statements from the Justice Department and the parties involved.
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