Two men, one from Bothell and one from Kirkland, were sentenced to federal prison Thursday in connection with a mortgage fraud scheme that defrauded banks of more than $4 million.

Bothell resident Robert Strong, 48, was sentenced to four years in prison, while Kirkland resident Anthony Waldron, 49, was sentenced to three-and-a-half years in prison in U.S. District Court in Seattle.

Between 2005 and 2008, the men used fraudulent information to obtain more than $13 million in loans on 30 different properties, primarily in South King County. When the scheme ended, with the fall of the real-estate market and the homes going into foreclosure, the lenders had lost more than $2.5 million. The case was investigated by the Internal Revenue Service Criminal Investigation unit.

At sentencing U.S. District Judge Thomas S. Zilly told the men that they knew what they were doing was “false and fraudulent … (they were) defrauding the banks” and their “motivation was money and profit.”

According to court records, the men recruited straw buyers with good credit to “purchase” the houses. These straw buyers were paid as much as $18,000 for use of their identity and credit score on the loan documents. The men submitted false employment information on the straw buyers, in one case claiming a woman made $22,000 per month working for an entity they created and controlled. Using this false information, the men got banks to fund the mortgages on the houses. The men would then quickly “sell” the house to another straw buyer at a higher price to claim the additional mortgage funds, court records continued.

The men also rented houses on “rent to own” plans, asking the renters to pay an option, ranging from $400-$7,000, to purchase the home at a later date at an increased price. The men also falsely claimed repairs were made to the homes and increased their value based on those repair bills. Instead, the men pocketed the money that they claimed went to home improvements, according to court records.

“Over the course of two years Waldron and Strong repeatedly made false representations on loan applications. Moreover, Mr. Waldron took the extra step of actually verifying this false information when called by individuals seeking to confirm the soundness of the application,” wrote prosecutors, including Assistant United States Attorney Tessa Gorman, to the court in sentencing documents. “In addition, over nearly a year long period, Waldron and Strong created and submitted eleven fraudulent invoices so that they could obtain an additional $400,000 in loan proceeds. Waldron and Strong’s actions affected approximately 30 properties, each of which was sold at a decreased price or foreclosed upon, thus causing a loss to each of the lenders, and damage to the neighborhoods.”

The amount of restitution the men owe is still being calculated and will be considered by Judge Zilly at a future hearing.