Fourteen real estate professionals face federal charges, accused of defrauding banks out of $47 million by flipping properties for overstated prices and getting lenders to write inflated mortgage loans, according to federal officials. The mortgage fraud case is being called one of the largest in Sarasota, Fla., history.

The real estate professionals — which include agents, attorneys, mortgage brokers, and other lenders — face 44 charges, including wire fraud and conspiracy to make false statements, in transactions that involved 22 Sarasota homes.

The real estate professionals are accused of using property investors who faked documents and made misstatements about their finances to qualify for inflated bank mortgages. Also, federal officials say money that was to be used to purchase a home or pay closing costs was used in other ways. The homes would be sold sometimes up to four times to family members, friends, or business partners with drastic increases in sales prices occurring within days or weeks of the original sale, court documents say.

Among those indicted include high-profile Sarasota real estate professionals who made it big during the housing boom, says U.S. Attorney Robert E. O'Neill.

The scheme was uncovered by a Herald-Tribune investigation in 2009, which revealed nearly two dozen people involved with $100 million in mortgage defaults. Law enforcement officials say more indictments are likely on the way.

Source: “14 Indicted in Real Estate Flipping Fraud Case,” The Herald-Tribune (Feb. 25, 2011)