U.S. authorities charged 41 people in a suspected mortgage fraud scheme that cheated lenders out of more than $64 million on more than 100 New York state properties, prosecutors said on Thursday.

Thirty-one suspects were arrested or had surrendered in New York, Pennsylvania, Ohio and North Carolina in a round-up dubbed Operation Bad Deeds. Charges in the eight separate criminal cases include conspiracy, wire fraud and bank fraud.

Prosecutors allege the suspects perpetrated an array of scams including one that targeted people on the verge of losing their homes, tricking them into giving up equity in their homes with false promises that the properties would be saved.

Among those charged are six lawyers, seven loan officers, three mortgage brokers, an accountant and a residential property appraiser. They made money through collecting fees on the transactions and stripping equity from the properties, prosecutors allege.

In one case, four individuals were charged in a scheme to sell foreclosed properties at inflated prices to straw buyers whose applications misstated their income and assets. The excess money from the inflated home mortgage loans were then distributed among the co-conspirators, prosecutors said.

As the U.S. economy struggles, we will continue to have a zero tolerance policy for those who defraud financial institutions and prey on homeowners on the brink of foreclosure, U.S. Attorney Preet Bharara said at a news conference.

Whether the economy was going up or the economy going down, these alleged fraudsters were trying to game the system, Bharara said.

Prosecutors called the fraud especially egregious because it involved mortgage brokers and attorneys who should have been looking out for the public good.

A key factor leading to the mortgage crisis was the failure of the gatekeepers -- including mortgage brokers and attorneys, said Richard Neiman, the superintendent of banks for New York state.

Unfortunately, instead of protecting our financial system, in some cases they abused their positions and joined criminal schemes to steal millions of dollars.

Crisis in the housing sector triggered the global financial crisis and recession when massive numbers of borrowers started defaulting on their mortgages, which had been sold by lenders and packaged into new investment vehicles.

Critics say many of the home loans never should have been made, but banks and lenders were seduced by the fast profits from selling mortgage-backed securities.

(Reporting by Edith Honan; editing by Daniel Trotta and Todd Eastham)

New York Pennsylvania Mortgage