New York Attorney General Letitia James has been criminally indicted on federal charges by a grand jury.
James, who led a civil fraud investigation against Trump in 2023, was indicted on charges of bank fraud in the Eastern District of Virginia in Alexandria, according to court documents.
Prosecutors accuse James of alleged bank fraud and making false statements to a financial institution regarding a mortgage loan for a house in Norfolk, Virginia, the documents state.
In a statement, James accused the president - who recently publicly pressured prosecutors to file criminal charges against her - of a "desperate weaponization of our justice system".
"He is forcing federal law enforcement agencies to do his bidding, all because I did my job as the New York State attorney general," she said.
"These charges are baseless, and the president's own public statements make clear that his only goal is political retribution at any cost."
The US prosecutor assigned to the case, Lindsey Halligan, meanwhile, said the case proved that "no one is above the law".
"The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public's trust," she said.
"The facts and the law in this case are clear, and we will continue following them to ensure that justice is served."
Trump appointed Halligan, his former personal attorney, to oversee the case after another US prosecutor, Erik Siebert, resigned. Siebert was reportedly ousted after he told the justice department he had not found sufficient evidence to charge James.
James' first court appearance is scheduled for 24 October in Norfolk.
The federal government alleges James bought a three-bedroom home in Norfolk using a mortgage loan that required her to use the property as her secondary residence and did not allow for shared ownership or "timesharing" of the home.
The indictment claims the property "was not occupied or used" by James as a secondary residence, but was instead "used as a rental investment property", which was being rented to a family of three.
The "misrepresentation" allowed James to obtain favourable loan terms that would not have been available for an investment property, prosecutors claim.
Halligan said that, if convicted, James could face up to 30 years in prison per count and up to a $1 million (£751,755) fine on each count.
James's attorney, Abbe Lowell, said: "We are deeply concerned that this case is driven by President Trump's desire for revenge."
Trump last month called on US Attorney General Pam Bondi, who leads the justice department, in a social media post to prosecute his political opponents, including James.
"We can't delay any longer, it's killing our reputation and credibility," he wrote.
James was one of several Trump adversaries named in that post. He also called on Bondi to investigate former FBI Director James Comey, who was criminally charged shortly after the post. He pleaded not guilty on Wednesday after being charged with making a false statement to Congress.
The justice department has also reportedly opened investigations into Trump's ex-national security adviser John Bolton and California Democratic Senator Adam Schiff.
In the civil fraud case brought by James, Trump was found liable of falsifying records to secure better loan deals, leading to a $500m (£375m) fine. The penalty was thrown out by an appeals court, which called the fine excessive, though it upheld that Trump was liable for fraud.
During the case, Trump frequently attacked James outside of the courtroom, accusing her of carrying out a "political witch hunt" against him. James said the courts had ruled that Trump was "not above the law".
James on Thursday said she stands behind her office's litigation against Trump and his organisation.
New York Governor Kathy Hochul, a democrat, said James's indictment "is nothing less than the weaponization of the Justice Department to punish those who hold the powerful accountable."
The New York Civil Liberties Union and American Civil Liberties Union called it "the latest in a long list of brazen abuses of power by President Trump".
BBC