Several state and federal law enforcement agencies unsealed charges Wednesday against four individuals in a $2.5 million reverse mortgage fraud scheme in Florida. Defendants Louis Gendason, 42, of Delray Beach, Fla.; Kimberly Mackey, 46, of Pittsburgh, Pa.; John Incandela, 24, of Palm Beach, Fla.; and Marcus Echevarria, 29, also of Palm Beach; were each charged with one count of conspiracy to commit wire fraud. All four made initial appearances in federal court Wednesday. If convicted, each faces up to 30 years in prison and a maximum fine of $1 million. A reverse mortgage is product for homeowners at least 62 years old that uses a portion of the property's equity as collateral and allows the homeowner to receive an income stream or line of credit. The only reverse mortgage insured by the federal government is the home equity conversion mortgage, or HECM, available through Federal Housing Adminstration-approved lenders. Reverse mortgages generally don't have to be repaid until the last surviving homeowner dies or moves out of the property. From May 2009 through November 2010, the alleged reverse mortgage scheme defrauded borrowers, Genworth Financial Home Equity Access Inc. and the FHA, according to court documents. According to the charges, defendants Gendason, Incandela and Echevarria worked as loan officers at First Continental Mortgage, a Maryland corporation licensed as a correspondent lender in Florida. First Continental had offices in Fort Lauderdale and Boca Raton, Fla., according to court documents. The three loan officers solicited individuals for reverse mortgages financed by Rancho Cordova, Calif.-based Genworth, a unit of Genworth Financial Inc. (GNW). To qualify the borrowers, Gendason allegedly altered real estate appraisals to fraudulently inflate the value of the borrowers' properties. None of the borrowers had sufficient equity in their homes to qualify for a reverse mortgage, according to court records. The defendants then submitted the fraudulent appraisals to Genworth, which, based on the false information, approved FHA-insured reverse mortgages valued at nearly $2.6 million, the law enforcement agencies allege. In total, 14 HECMs were approved, according to court documents. Defendant Kimberly Mackey, a licensed title agent and proprietor of REO Land Services Inc. in Pittsburgh then allegedly fraudulently closed the Genworth loans, failing to pay off the borrowers' existing mortgages. Genworth wired the proceeds to Mackey as the designated closing agent. Mackey attempted to conceal the fraudulent closings by preparing false HUD-1 settlement documents that showed the existing mortgages had, in fact, been paid off, according to court records. Between May 2009 and November 2010, Mackey received nearly $2.6 million of proceeds from Genworth and fraudulently diverted at least $988,086 to a bank account controlled by Incandela and Gendason, according to the charges. To perpetuate the fraud, the defendants allegedly engaged in a loan modification scheme to conceal the Genworth reverse mortgage transactions from the original mortgage lenders, whose loans remained unpaid. In some cases, the defendants conspired to create fictitious offers to buy some of the properties by short sale. In other instances, defendants made monthly mortgage payments to the borrowers’ original lenders to hide the existence of the reverse mortgages. “These defendants preyed on senior citizens on fixed and modest incomes," said U.S. Attorney Wifredo Ferrer. "While legitimate loan modifications and reverse mortgages are useful tools to help those who need it, we will remain vigilant to make sure these tools are not misused by those who seek to line their own pockets." Write to Kerry Curry. Follow her on Twitter @communicatorKLC.