ANCHORAGE - The biggest loan fraud scheme ever to be prosecuted in Alaska may never see the courtroom.
That's because prosecutors have struck a plea agreement with seven people and one company on fraud and conspiracy charges; another defendant withdrew his agreement late last week.
The case was slated for trial this week, but the plea agreements may keep most of the trials from ever taking place. This comes 14 months after the December 2007 indictment.
Sentencing hearings are slated for April and May.
Prosecutors say the scam allegedly took place between 2003 and 2006 and featured all components of the city's real estate industry: agents, buyers, sellers, appraiser, and even mortgage and title companies.
The group purchased then resold homes at inflated prices, allegedly creating at least 20 foreclosures while defrauding 13 banks and mortgage companies of nearly $1.7 million.
Prosecutors dropped charges against one mortgage executive, Susan McCready of Alaska State Mortgage, leaving one appraiser still scheduled to face trail.
Defendants agreed to plead guilty to dozens of criminal charges connected to more than 50 real estate deals between 2003 and 2006.
The defendants accused of bank fraud will face the stiffest penalties, potentially a maximum sentence of 30 years in prison, plus a $1 million fine.
Anchorage real estate broker and investor Lance Lockard. He agreed to plead guilty to 12 counts including conspiracy and bank fraud.
Escrow agent Holli Stroud. Accused of filing bogus paperwork while employed at Land Title, Alyeska Title and Stewart Title agencies, Stroud agreed to plead guilty to seven counts including conspiracy and bank fraud.
Real estate investor Gary Paterna. He is also Lockard's father-in-law, and he agreed to plead guilty to five counts including conspiracy and bank fraud.
Former Alaska State Mortgage loan officer Cerise Sanders. She agreed to plead guilty to three counts including conspiracy and bank fraud.
Real estate agent Keith Facer. He agreed to plead guilty to three counts including conspiracy and wire fraud.
Real estate agent Don Murray. He agreed to plead guilty to four counts, including conspiracy and wire fraud.
Builder and investor Jonathan Ruf. He agreed to plead guilty to four counts including conspiracy and bank fraud.
Alaska State Mortgage also entered a plea. The company agreed to receive three years' probation and pay a $91,478 criminal fine. Of that, $50,000 will be due at sentencing.
Real estate appraiser Charles Carlson. He changed his plea to not guilty on Friday after originally agreeing to a plea of guilty on eight counts.
Art Clark, president of the Alaska Association of Realtors, said it would be nice to think that the investigation has weeded out the industry troublemakers.
"I'm not sure the FBI is done yet," he said.
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