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Sixteen people are accused in the two multimillion dollar mortgage fraud schemes involving overvalued New York City suburban homes.
Sixteen people -- including drug smugglers, real estate appraisers and a bank employee -- hatched two multimillion dollar mortgage fraud schemes involving overvalued suburban homes that were sometimes used as stash houses, authorities said.
The defendants, arrested Wednesday, were awaiting arraignment in Brooklyn federal court on bank fraud, money laundering and drug trafficking charges. If convicted, they face up to 30 years in prison.
In one scheme, the ring leaders recruited straw buyers to sign contracts on 19 homes in towns on Long Island, an indictment said. Using inflated values set by two crooked appraisers, the buyers applied for fraudulent loans that cheated lenders out of $8.8 million, it said.
A second, similar plot on Long Island involved a branch bank vice president charged with overstating the assets of the straw buyers on loan forms on nine homes. That fraud cost lenders $4.9 million.
Authorities said some of the defendants were corrupt brokers who used properties for a narcotics operation. They face separate charges of smuggling and distributing more than 5 kilograms of cocaine.