Five Indicted in Alleged Mortgage Fraud

A federal grand jury has indicted five people on federal charges of conspiracy to commit bank fraud and other crimes tied to an alleged mortgage fraud scheme.

The five named in the indictment were married couple, Melissa and Rick Villegas of Sacramento, Kathleen Delapp of Auburn and another couple, Robert Martinson and his wife Sheryl Hayden of Newcastle.

The eight-count indictment handed up Thursday alleged that the group "schemed to defraud mortgage lenders by submitting fraudulent loan applications in the names of straw buyers and other investors," according to a news release from the office of U.S. Attorney McGregor Scott.

Mortgage lenders affected by the group include Aegis Mortgage and IndyMac Bank, a federally insured financial institution.