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updated: 7/25/2012 6:08 AM

Seven face federal fraud charges in mortgage 'scheme'

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Seven men, mainly from the suburbs, are facing federal fraud charges stemming from what prosecutors called a "scheme" to bilk mortgage lenders out of more than $8.5 million.

Facing federal mail fraud and wire fraud charges are Steven Klebosits, 40, of St. Charles; Thomas Hyland, 40, of Glen Ellyn; Joseph Natalizio, 39, of Bloomingdale; and Joseph Abate, 48, of Downers Grove.

Diomede Cardone, 32, of Addison, is facing wire fraud charges. Two other men -- Yusef Allan, 31, of Chicago, and Jason Strever, 30, of Sandwich -- are facing mail fraud charges.

Prosecutors said the men worked together to "fraudulently obtain" more than 20 residential mortgage loans valued at more than $8.5 million between 2007 and 2008 for properties on the south side of Chicago.

Court papers charge that Klebosits and Hyland sold the properties at inflated prices, knowing the buyers had fraudulently obtained the loans and would not be able to repay them, and that the other men recruited buyers or helped falsify loan applications.

Each man faces a maximum of 20 years in prison and $250,000 fine if convicted, federal officials said.

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