Sep 3, 2014 By David Singer 1 min read

The founder of a brokerage firm has pleaded guilty in federal court to conspiracy to commit wire and bank fraud.

Richard Stromberg, 49, who had operated Great American Equity Mortgage at 1035 Boyce Road, pleaded guilty before District Judge Donnetta Ambrose after he “knowingly conspired with various other individuals (from 2002-08) to defraud lenders,” U.S. Attorney David Hickton said.

The conspiracy involved submission of loan applications to lenders that misrepresented the borrowers’ financial condition, such as inflating income and assets, and overstated appraisals for properties serving as collateral for the loans, Hickton said. Stromberg and others also submitted false supporting documentation with misrepresentations carried over from the applications.

According to the U.S. Attorney’s office, banks lost nearly $2.5 million and some of the mortgages brokered by Stromberg’s firm ended in foreclosure.

Stromberg could have faced 30 years in prison, a fine of $1 million, or both, yet a plea agreement calls for a five-year prison term and an amount to be determined in fines, according to Assistant U.S. Attorney Brendan Conway, who is prosecuting the case.

Judge Ambrose scheduled sentencing for Jan. 12, 2015.