Four people, including a Garden City attorney and his wife, were arrested on federal bank fraud and conspiracy charges in a scheme that authorities said involved flipping a short-sale foreclosure property to a Catholic school -- while defrauding the Bank of America out of more than $500,000.

Nicholas A. Pellegrini, 51, and his wife, Paula Berckhoff, aka Paula Pellegrini, 34, both of Garden City, as well as Joseph Atias, 50, and his wife, Sofia Atias, 44, both of Great Neck, were arrested Tuesday, the U.S. Department of Justice said.

The four are to be arraigned Tuesday afternoon before U.S. Magistrate Judge William D. Wall at U.S. District Court in Central Islip, authorities said.

Each defendant faces up to 30 years in prison and fines as well as the forfeiture of $539,000 in alleged illegal profits from the sale.

Federal authorities said Sofia Atias defaulted in 2011 on a $750,000 mortgage on a home at 83 Cathedral Ave. in Hempstead -- property adjacent to Sacred Heart Academy, an all-girls Catholic School. As Bank of America began foreclosure proceedings, authorities said Nicholas Pellegrini, acting as attorney for the Atias, reached an agreement to sell the home and property to Sacred Heart for $925,000 -- an amount, federal authorities said, that "would have been enough to repay the Atias' debts to the bank."

Instead, authorities said, Joseph and Sofia Atias convinced Bank of America to agree to short-sale the property to the Jefferson Real Property Corp., whose secretary and treasurer was Paula Berckhoff -- aka Paula Pellegrini -- for just $480,000. Authorities said both Paula Pellegrini and Sofia Atias then "both falsely represented that neither would receive any undisclosed proceeds from the transaction" -- and "further claimed that the short sale was not an attempt to 'flip' or use 'straw buying' to avoid repayment" of the debt.

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But, according to the indictment announced Tuesday by U.S. attorney for the Eastern District of New York, Loretta E. Lynch, and George Venizelos, assistant director-in-charge of the FBI's New York Field Office, just months after the fraudulent short sale the two couples did resell -- or flip -- the house, finalizing the deal with Sacred Heart Academy for the agreed-upon price of $925,000. The deal defrauded Bank of America out of $539,000, authorities said.

"Through a web of lies and false documents, the defendants took advantage of a school's desires to improve its' students' athletic facilities, lied to win concessions from a bank, and then lied again by 'flipping' the property and defrauding the bank of over a half a million dollars," Lynch said.

As Venizelos said: "Bank fraud burdens lenders with bad loans and weakens our financial markets. Individuals who engage in this criminal activity should be reminded that they will be vigorously investigated and held accountable."

It was not immediately clear if any of the four arrested is represented by an attorney.