One year after 10 Massachusetts men were accused of participating in a real estate fraud scheme that netted millions from unsophisticated buyers, three more defendants were added last week, media reports said.


Affordable Mortgage Co. president Lawrence V. Lynch, 53, of Wilbraham, used-car salesman Edgar Corona, 27, of Springfield, and Kathryn Zepka, 57, were arrested in Springfield, Mass., last Wednesday, media accounts said. They face multiple counts of federal fraud and money-laundering conspiracy, reports said.


The three are accused in a new, 69-count indictment unsealed in U.S. District Court Wednesday along with the original 10 defendants, accounts said. Internal Revenue Service investigators said the group participated in a long-running “land-flip” scheme in which they recruited first-time buyers to purchase run-down homes, according to the Springfield, Mass., Republican.


The players – lawyers, real estate brokers, appraisers, lenders and others – allegedly nudged the buyers through a mortgage process, inventing assets and salaries and inflating the value of properties, the Republican reported.


According to the indictment, the alleged fraudsters bought and sold homes in quickie transactions, making big profits and leaving the homeowner to drown in debt and default on the mortgage, reports said.


The allegations in the new indictment cover dozens of properties in Greater Springfield turned over between 1995 and 2002, reports said. The indictment expands one from 2004, adding more properties, charges and $1.5 million more in fraud, according to reports.


Assistant U.S. Attorney William M. Welch II told the Republican the original defendants defrauded banks, buyers and the government, which insures the mortgages, for $15 million.


Lynch owns the Wilbraham mortgage company in Springfield, Mass., accounts said. He assisted the scheme by obtaining loans for buyers and partnered with one of the original 10 defendants in a company called Tiffy Corp. to buy and sell real estate, according to the indictment.


Corona pleaded innocent Wednesday to two counts of fraud and one count of money-laundering conspiracy; Lynch pleaded innocent to one count each of fraud and conspiracy, the Republican reported. Zepka pleaded innocent yesterday to 17 counts of fraud and money-laundering conspiracy, accounts said.


U.S. Magistrate Judge Kenneth P. Neiman released all three on bail, reports said.


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