Alleged loan-fraud scam leads to arrests

BOSTON, May 17 (UPI) -- Two Boston lawyers and seven mortgage brokers were among 11 people arrested in connection with an alleged $10.6 million loan-fraud scam, officials say.

Federal officials allege the 11 defendants took part in a scheme to use more than $10.6 million in fraudulently obtained loans to buy 21 Boston-area properties, The Boston Globe reported Saturday.

Officials allege the scam, reputed to be the largest mortgage fraud in Massachusetts in decades, ultimately earned its participants nearly $1.7 million in profit.

Based on U.S. District Court charges, the scam involved fraudulent borrower information and inflated property costs that were used to earn additional loans from banks and mortgage lenders.

County deed records show at least 14 of the properties have since been seized by mortgage lenders.

The lawyers and mortgage brokers accused in the case have all pleaded innocent to charges ranging from conspiracy to money laundering, the Globe reported.