A California man accused of scamming hundreds of distressed borrowers out of $3.1 million in fees and mortgage payments is facing multiple federal charges.

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced the arrest of Alan David Tikal, 44, of Brentwood, Calif. on Monday.

Authorities claim Tikal promised more than 1,000 distressed homeowners that he could pay off their existing mortgage debts, replacing them with new loans originated at his firm, KATN Trust.

Tikal allegedly told borrowers he had the ability to reduce their outstanding principal amounts by 25%. Authorities accuse Tikal of taking distressed mortgage holders' upfront fees and having them make regular payments on new loans.

To keep borrowers from finding out that the plan was fraudulent, Tikal told homeowners to ignore late statements and foreclosure notices from lenders.

By the time the scam was uncovered, the homeowners lost a combined $3.1 million and, in some cases, their homes to foreclosure. The scheme operated from January 2010 through this year.

"As a result of his alleged deceit, homeowners' financial condition worsened, and for some, the opportunity to participate in legitimate loan modification programs such as the government-sponsored Home Affordable Modification Program (HAMP) was lost," said Christy Romero, Special Inspector General at SIGTARP."

The investigation into the fraud was handled by the U.S. Attorney's Office for the Eastern District of California, the California Attorney General's Office, SIGTARP as well as the Internal Revenue Service and the Stanislaus County District Attorney's Office.

If convicted, Tikal could face up to 30 years in prison for mail fraud.