A former southern California mortgage broker sentenced this week to prison for a mortgage fraud scheme that ended in 2001 continued to work in the mortgage lending business after his license was revoked, prosecutors said.

Kenneth C. Ketner, 58, was sentenced Monday to four years, 9 months in prison and ordered to repay $9.27 million his former company, Mortgage Capital Resource, fraudulently obtained from banks, the Orange County Register reported.

Mortgage Capital, which offered second mortgages for debt consolidation, had a $20 million line of credit from an Illinois bank, Household Commercial Finance, the Register reported. Ketner settled a 2001 civil suit by the bank for $5 million, and the California Department of Real Estate revoked Mortgage Capital Resource’s license in when it was refused access to the company’s account books, the Register said.

Prosecutors indicted Ketner in 2005 on 16 counts of fraud, alleging he had created a Ponzi scheme that netted more than $9 million which he used to buy investment property, cars and boats. Ketner pleaded guilty in August to two counts of mail and wire fraud, but prosecutors allege he runs two consulting firms that receive money from three mortgage lenders, the Register reported.

Prosecutors said the consulting firms, Danbury Consultants and NFC Consultants, received revenue from New American Financial in Newport Beach, Segway Financial in Irvine, and Key Mortgage Corp., doing business as KMC Corp.

Ketner has not been charged with or convicted of any additional crimes other than those he admitted to committing as the head of Mortgage Capital Resource.

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