Two real estate brokers, three lawyers and five others were charged with fraudulently obtaining more than $10 million in home loans from American Home Mortgage Investment Corp and BNC Mortgage, a subsidiary of Lehman Brothers Holdings Inc, U.S. prosecutors in New York said on Tuesday.

An indictment unsealed in U.S. District Court in Brooklyn charging the 10 people with conspiracy, bank fraud and wire fraud stems from one of the investigations spurred by the mortgage crisis that has rocked the economy for the past three years.

Their activity hurts the trust that everyone should be entitled to when dealing with their attorneys and brokers, FBI Assistant Director-in-Charge Joseph Demarest said in a statement. The FBI is dedicated to tracking down those that work to abuse the system and steal money while causing further damage to the real estate market.

The office of Brooklyn U.S. Attorney Benton Campbell said in a statement that the indictment charges the defendants with submitting false loan applications to create the appearance that properties in the New York City boroughs of Brooklyn and Queens were being bought by credit-worthy individuals when they were in fact being purchased at inflated prices by straw buyers.

Those buyers were controlled by two of the lawyers and one of the real estate brokers, according to court papers. The alleged offenses took place between January 2005 and May 2007.

In addition to American Home Mortgage and BNC, investigators identified the other duped lenders as Fremont Bank and WMC Mortgage, a subsidiary of GE Money Bank.

The case is USA v Akin Ayorinde et al, U.S. District Court for the Eastern District of New York, No. 10-258.

(Reporting by Grant McCool, editing by Gerald E. McCormick)

Mortgage