NEW YORK (1010 WINS)  -- Eight people, including two lawyers, have been indicted in a residential mortgage fraud scheme that netted them tens of millions of dollars, state Attorney General Eliot Spitzer said Tuesday.

Spitzer said the defendants used dozens of straw buyers, people who claimed to be buying property and offered false job, income and other information to get mortgages, in hundreds of bank transactions worth a total of more than $200 million.

The defendants would inflate the cost of a property they wanted to buy by $100,000 or more, Spitzer said. They would then give the lending bank real estate appraisals that misrepresented the physical condition and the market value of the property and the identities of the people who prepared the reports, he said.

To illustrate the scheme, Spitzer cited a $310,000 house purchase in January 2004 for which the defendants obtained a $450,000 mortgage. He said they paid the owner the $310,000, paid off another $20,000, some of it to the straw buyer, and pocketed $120,000. When they defaulted on the mortgage, the bank suffered the loss, he said.

Spitzer said the defrauded banks included small, large, local and national institutions.

``Virtually all of the major names are involved at one point or another,'' he said.

The attorney general also said that when the defendants defaulted on the mortgages, the banks would go after the phony mortgage applicants and property buyers. These straw buyers usually were left with legal problems and ruined credit.

The defendants, Spitzer said, have been operating the mortgage scheme since at least 2001, chiefly in Brooklyn, Queens and Suffolk County. He said his investigation began in 2002, but he refused to say what tipped investigators off.

Spitzer said the 83-count indictment unsealed in Brooklyn's state Supreme Court charges the eight with enterprise corruption, first- and second-degree grand larceny, scheme to defraud and falsifying business records. The defendants would face up to 25 years in prison if convicted of the top two charges, enterprise corruption and first-degree grand larceny.

Seven of the eight defendants were in custody, and one had fled, Spitzer said. The seven in custody were to be arraigned in Brooklyn later Tuesday.

Spitzer said his office received a court forfeiture order of $8.3 million against the defendants. He said that amount, which will be seized from the defendants' assets, is the value of the 20 transactions cited in the forfeiture request.

The attorney general said the defendants not only harmed individuals and lending institutions but also undermined the housing market in the neighborhoods where they carried out their schemes by artificially inflating housing prices.