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The defendants are accused of bank fraud, mail fraud and other charges in connection with a so-called "cash back to buyer" scheme in that involved the purchase of five houses in South Lake Tahoe and Nevada City.
Acting U.S. Attorney Lawrence Brown of Sacramento said the banks that granted mortgage loans for the properties, including Washington Mutual Bank and Countrywide Bank, lost more than $1 million.
Those named in the indictment issued last week include Dennis Moore, 50, of Hillsborough, who bought the five properties between 2005 and 2007; and Haiying Fan, 42, of Millbrae, his real estate agent.
Also named are Veronika Wright, 33, of San Ramon, Moore's mortgage broker; and Mitchell Wright, 36, of San Ramon, who is accused of creating a bogus Web site to substantiate allegedly false employment claims by Moore.
A fifth defendant is Gary George, 50, of Olivehurst in Yuba County, a tax professional who is accused of creating false financial documents to support allegedly false financial claims by Moore.
Assistant U.S. Attorney Sean Flynn said that Moore allegedly required the sellers of the properties to pay large commissions of up to 20 percent to Fan and that Fan allegedly gave most of the commission funds back to Moore.
Flynn said that to induce the sellers to pay the large commissions, Moore often offered to buy the properties at prices above their list prices.
Flynn said that Moore allegedly collaborated with Wright and the other defendants to create false loan application statements about Moore's income, employment, assets and compliance with tax obligations.
Brown said mortgage fraud is a top federal law enforcement priority. He said, "These scams hurt not just the lending institutions, but area homeowners and taxpayers alike."
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