Lawyers, real estate brokers and accountants were among 38 people charged in a large mortgage fraud crackdown across New York.
The arrests are part of a national effort by the Justice Department to crackdown on suspects who are acused of lying, cheating and stealing from banks and unsuspecting homeowners.
The arrests by the FBI come in part because a tax preparer was caught submitting more than 1,000 fake pay stubs and more than 30 bogus w-2's to help people get mortgages they simply could not afford -- or to help scammers steal mortgage cash from lenders.
Officials said that tax preparer agreed to cooperate with the FBI to catch others. Soon real estate agents and others who came in seeking bogus documents from his Queens office were soon caught on tape engaging in the alleged fraud.
Prosecutors said among those charged, Wilfredo Blas and 12 others who allegedly submitted bogus documents and engaged in wire-fraud to help steal millions.
The FBI fanned out across New York City early Thursday to make the arrests. At 26 Federal Plaza, prison busses had to be called in to transport the more than two dozen suspect to the federal courthouse.
The investigation -- dubbed "Operation Stolen Dreams" - coincides with a recent nationwide crackdown on mortgage fraud suspects with results of hundreds of arrests announced by U.S. Attorney General Eric Holder in Washington.
In New York, U.S. Attorney Preet Bharara described the New York scams as "varied and the victims are numerous." Court papers state dozens of properties worth more than $29 million were part of the fraud stretching from the South Bronx to Woodside Queens to Dix Hills, Long Island.
Federal prosecutors in Connecticut also announced criminal charges resulting from three separate mortgage-fraud investigations there. And in New Jersy, more than two dozen suspects were arrested yesterday said U.S Attorney Paul Fishman.
In one of the New York scams, suspects are also accused of running a boiler-room operation, telling homeowners behind in their mortgage payments they could negotiate with the banks in exchange for an upfront fee. Instead, Bharara said the group simply pocketed the cash. "They did not get a lifeline. They got suckerpunched," Bharara said.
Among the New Yorkers charged, Nidia Campos, John Isola, Jose Rosario, Mohammed Islam, Anthony Reid, Dustin Dente, among others. All the suspects were expected to appear in court later Thursday. Several defense lawyers gathering for the court hearings at the courthouse said their clients deny wrongdoing.
The arrests nationwide were part of a three month crackdown focusing on more than 1,000 suspects. Officials said no Wall Street or bond rating firm executives were charged.
In California, arrests included so-called straw buyers who helped inflate prices of homes. In Michigan, officials spoke of more than $100 million in scams and rip-offs.
These arrests come one day after FBI agents in New Jersey arrested dozens of people there on similar mortgage-fraud related charges.
In New York, many of the arrests and FBI searches are taking place in numerous Queens neighborhoods that were hit hard by the mortgage meltdown.
Secret Service agents and postal inspectors are also assisting in the investigation.
The suspects are expected to appear in federal court in Manhattan Thursday afternoon.