SEATTLE -- Local homeowners trying to sell their homes are caught up in an $18 million mortgage fraud scheme. What's worse is that federal agents say some of the people behind the scheme worked in the mortgage industry.

Agents call it a wire fraud and money laundering conspiracy that targeted dozens of local lenders, and home sellers who never saw it coming.

In a matter of months, a house that sits just south of Seattle changed hands multiple times in what federal agents call a conspiracy to defraud the sellers and trick the bank.

A two-year investigation turned up house after house of which the seller was convinced to offer private financing, never knowing the defendants were also getting hundreds of thousands of dollars in mortgage loans from local lenders.

Agents say the fraudulent transactions took place in Auburn, Bellevue, Des Moines, Fircrest, Issaquah, Kent, Lakewood in Pierce County, Pacific, Puyallup, Renton, SeaTac, Seattle, Spanaway and Tacoma.

Sarah Vogel, assistant. U.S. attorney, says there's evidence of as many as 80 different loans.

"The escrow documents are supposed to reflect all of the loans that are secured by that property and in this case, as the grand jury has alleged, the escrow documents were falsified," she said.

Agents swooped in on five suspects Wednesday morning: Humberto Reyes-Rodriguez of Federal Way, Alexis Ikilikyan of Auburn, Micki Thompson in Tacoma and Mario Marroquin of Kent. William Poff was also arrested in Michigan.

The four local defendants made their first appearance before the judge Wednesday and faced two counts each of bank fraud and wire fraud. If found guilty, they face up to 20 years and $1 million fine each.

According to the indictment charges, most of the defendants were industry professionals -- licensed real estate agents, mortgage loan originators, closing agents and even a licensed notary.

The special agent in charge calls them real estate professionals who manipulated home sales for pure profit while some of the properties when into foreclosure and innocent private citizens were defrauded.

The defendants allegedly got multiple loans for more than the homes were worth, then stopped making payments to both the lender and the seller. Investigators say the conspiracy even included fake home buyers and phony home repair companies.

For the time being, the defendants will stay behind bars.

The trial is set for August 10.