The former head of a "warehouse lender" pleaded guilty Thursday in a $1.8 million fraud that used a national mortgage company in Melville as a go-between in a sham to sell off toxic loans to investors, federal prosecutors said.

Poppi Metaxas, 62, of California, faces up to 5 years in prison after pleading to conspiracy to commit bank fraud against California-based Gateway Bank, where she was chief executive and president during the height of the mortgage crisis, said the U.S. attorney's office for the Eastern District, which serves Long Island.

Gateway bankrolled companies in the mortgage business, issuing lines of credit so they could lend to the public, but the bank was in such dire financial straits in 2008 that federal regulators ordered it to get rid of bad loans and increase capital reserves, prosecutors said.

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To satisfy regulators, Metaxas helped orchestrate a $15 million sale of toxic assets to three investment buyers by wiring $3.6 million in 2009 to now-defunct Lend America of Melville in a "sham loan agreement," federal officials said.

Metaxas told Gateway's board that the loan would alleviate liquidity problems at Lend America, the bank's biggest client, authorities said.

Lend America transferred the funds to its payroll account and then to the accounts of the asset buyers, all based in the Eastern District, which also covers Queens, Brooklyn and Staten Island, federal officials said.

The "round-trip" nature of the deal put the bank deeper in financial jeopardy, prosecutors said.

Metaxas pleaded guilty in front of U.S. District Judge Joseph F. Bianco in Central Islip. Calls and emails to her attorneys were not immediately returned Thursday evening.

"As Gateway Bank struggled to survive under the burden of its accumulated toxic assets, its CEO Poppi Metaxas turned to sham transactions to deceive regulators and convince them that the bank had rid itself of its bad loans and underwater real estate holdings," said acting U.S. Attorney Kelly T. Currie.

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That same year, the U.S. attorney's office sued Lend America, accusing it and top executives of lying on loans so they could be covered by federal insurance, routinely and knowingly approving refinances without funding them and concealing fraud.

Lend America's license to make federally insured loans in 46 states was revoked Nov. 30, and the company abruptly shut down, laying off most of its 600 workers and leaving hundreds of borrowers in the lurch, authorities said.

The following year, Michael Ashley, the company's executive vice president, made a deal with prosecutors without admitting liability. He agreed to keep away from anything tied to federally related loans, from appraising properties and marketing mortgages to working as a consultant or housing counselor.

Ashley's attorney, Kevin Keating of Garden City, declined to comment Thursday.