WASHINGTON (TNND) — The Justice Department has opened an investigation into the Federal Reserve's renovation of its D.C. headquarters and Chairman Jerome Powell.

Prosecutors allege Powell lied to Congress while testifying last June about the cost of the renovations. Powell confirmed in a video posted Sunday that the Fed received Grand Jury subpoenas from the DOJ, threatening criminal indictment.

That testimony concerned in part a multi-year project to renovate historic Federal Reserve office buildings," Powell said.

Prosecutors are investigating whether or not Powell was truthful about the costs of the renovations, which have grown from around $1.9 billion to at least $2.5 billion. During his testimony in June, Powell told lawmakers the renovations didn't include lavish features like a VIP dining room and new marble.

There are no special elevators. They're old elevators that have been there. There are no water features. There are no beehives and there are no roof terrace gardens," Powell told lawmakers in June, 2025.

The Fed has said the rise in cost is because of materials, labor and unexpected complications like asbestos. But critics, including President Trump, have called the project a misuse of funds. In December, Trump even hinted that the administration could be bringing a lawsuit against Powell.

The guy is just incompetent. There is nothing you can do about it. He's just a very incompetent man but we're probably going to bring a lawsuit against him," Trump said in December.

In an interview with NBC News on Sunday, Trump denied any involvement in the criminal investigation. Trump said he doesn't know anything about it, while other administration officials also weighed in.

I do know one thing for sure, Jerome Powell has proven he is not very good at this job. Whether he's a criminal, that's an answer the DOJ is going to have to find," said White House Press Secretary, Karoline Leavitt, during an interview with Fox News Monday.

But Powell and multiple lawmakers, on both sides of the aisle, slammed the investigation. Calling it a political tactic by the administration. Sen. Thom Tillis, R-N.C., wrote on 'X' in part, "It is now the independence and credibility of the Department of Justice that are in question."

Donald Trump has been trying virtually from the day he got into the White House to get control of the Fed so that he can make the decisions about monetary policy," Sen. Elizabeth Warren, D-Mass., said during an interview with CNN Monday.

Former federal prosecutor Neama Rahmani told The National News Desk that, unless there's a connection involving some type of fraud, charging Powell criminally could prove to be tough.

Bank fraud, securities fraud, wire fraud, some sort of bribery or other corruption, I don't see a basis to charge him criminally," Rahmani said.

But if an indictment is handed down, he expects to see a similar defense to other officials prosecuted. Including former FBI Director James Comey and former National Security Advisor John Bolton.

The fact that we have Powell standing strong, digging in his heels, leads me to believe that we're likely going to have another fight like we saw in those others cases," said Rahmani.

The new investigation comes just months after Trump tried to fire Fed Governor Lisa Cook for alleged mortgage fraud. A case the Supreme Court is scheduled to hear arguments about later in January. Powell's term as Fed Chairman ends in May, 2026 by he will remain a member of the Fed's Board of Governors until 2028.