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Prosecutors expressed their concerns in a memo last month, sources said.

Prosecutors who investigated New York Attorney General Letitia James for possible mortgage fraud found evidence that would appear to undercut some of the allegations in the indictment of James secured earlier this month -- including the degree to which James personally profited from her purchase of the property -- according to a memo summarizing the state of the case in September, sources told ABC News.

Prosecutors who led the monthslong investigation into James' conduct concluded that any financial benefit derived from her allegedly falsified mortgage would have amounted to approximately $800 in the year she purchased the home, sources said.

The government lawyers also expressed concern that the case could likely not be proven beyond a reasonable doubt because federal mortgage guidelines for a second home do not clearly define occupancy, a key element of the case, according to sources.

Prosecutors detailed the findings to the previous U.S. attorney, Erik Siebert, in an internal Department of Justice memo summarizing the status of the case early last month, according to sources familiar with its contents. Siebert was ousted by President Donald Trump last month after refusing to seek charges against James amid what critics call Trump's campaign of retribution against his perceived political foes.

"I want him out," Trump said the day before Siebert was ousted, telling reporters that it was because Virginia's two Democratic senators supported his nomination. Of James, Trump said, "It looks to me like she is very guilty of something, but I really don’t know."

Interim U.S. Attorney Lindsey Halligan -- who Trump appointed with the explicit mandate of bringing charges against James and others -- secured an indictment against James earlier this month on charges of bank fraud and making false statements to a financial institution.

Last week Halligan abruptly fired the author of the memo, career prosecutor Elizabeth Yusi, in part due to her resistance to bringing the case against James, sources said.

James, who has denied all wrongdoing, is set to appear in federal court in Norfolk on Friday to be arraigned.

According to the indictment, James falsely described the property as a second home but used it as an "investment property" rented to a family of three. The grand jury alleged James collected thousands of dollars in rent and would have saved $17,837 over the life of the mortgage versus a loan at a higher rate.

"The charges as alleged in this case represent intentional, criminal acts and tremendous breaches of the public's trust," Halligan said in a statement earlier this month.