Two mortgage brokers and a loan officer surrendered Tuesday in Riverhead to face charges that they were part of a $12.2 million mortgage fraud involving more than three dozen homes, the Suffolk district attorney's office said.
The three defendants were arrested as part of a continuing probe of an alleged scam in which straw buyers used phony pay stubs to obtain bank loans for the purchase of 40 houses, mostly in Central Islip and Brentwood, prosecutors said.
Ten people have been arrested in connection with the investigation, and more arrests are expected, prosecutors said.
Connie Salas, 46, of Brentwood, pleaded not guilty Tuesday in Suffolk County Court to multiple counts of third-degree grand larceny, first-degree falsifying business records and first-degree scheme to defraud.
Romel Pierre-Lys, 57, of Central Islip, and William Wild, 54, of Coram, each pleaded not guilty to multiple counts of second-degree forgery.
"These particular defendants left a trail of frauds, forgeries and foreclosures in Suffolk County," Assistant District Attorney Marc Lindemann said following the arraignments.
Salas, chief broker of Easy Homes Realty in Brentwood; Pierre-Lys, a loan officer for National City Mortgage in Melville, and Wild, a mortgage broker, are among 16 people named in a 282-count indictment handed up last week by a Suffolk grand jury.
Attorneys for Salas and Pierre-Lys said their clients are victims of the declining Long Island real estate market.
"Mrs. Salas is a hardworking, law-abiding citizen who, not unlike many other Americans, was victimized by the irresponsible practices of the mortgage lending industry," said her attorney, Keith Abramson of Central Islip.
Pierre-Lys left the mortgage industry more than two years ago because of the economic downturn, said his attorney, Jason Russo of Uniondale.
"Mr. Pierre-Lys is a hardworking guy who, if there is any truth to the allegations, any impropriety on his part was inadvertent and unintentional," Russo said.
An attorney for Wild could not be reached for comment.
Salas was ordered held on $20,000 bond or $10,000 cash bail by County Court Judge James Hudson. Wild and Pierre-Lys were ordered held on $1,000 bail.