A federal judge in Arizona sentenced a former loan officer to 15 years in prison this week for running a $40 million mortgage fraud scam.

The scheme preyed on lenders, including Countrywide Financial, which is now under the umbrella of Bank of America (BAC)

The U.S. Attorney's Office for the District of Arizona said Paige Kinney, otherwise known as Jamie Lee Lawler, was sentenced to 15 years on charges of bankruptcy fraud, wire fraud, mail fraud and bank fraud. Lawler also was ordered to pay $22 million in restitution. 

Authorities claim Lawler spent 2005 through 2007 conspiring with other parties to defraud lenders. She pleaded guilty to using straw buyers to acquire properties that the buyers had no intention of living in. Kinney, a loan officer, then obtained financing for the acquisitions by submitting fraudulent mortgage applications and altering the records.

Lenders relying on Kinney's submitted documents issued mortgages that exceeded actual sales prices. Cash received back from those loans was then deposited in Kinney's accounts, allowing her to spend money on luxury vehicles, jewelry and homes. In all, she received $8.7 million through cash-back transactions, according to authorities.  

Prosecutors claimed that after Kinney was indicted, she attempted to hide some assets and liabilities from a bankruptcy court by falsifying her name and Social Security number.  

Kinney also was accused of committing insurance fraud by staging a burglary of her residence and then collecting $130,000 from the Allstate Insurance Co. At her sentencing, a federal judge noted that "the defendant engaged in a breathtakingly aggressive fraud," the U.S. Attorney's Office said.  

kpanchuk@housingwire.com