Two local brothers pleaded guilty on Wednesday to orchestrating a $4 million mortgage fraud scheme that defrauded 24 area lenders.

Baretta Dean Bork, 35 of Mound, and Xavier Willis Bork, 32 of Eden Prairie, each face up to five years in prison for one count of conspiracy to commit mortgage fraud through the use of wires and income tax refund fraud. They were both charged in January.

According to the U.S. Attorneys office, the Borks worked as loan officers from December 2003 to March 2008. Through their work, they recruited straw buyers to purchase 33 properties and completed false mortgage loan applications on behalf of those buyers.

To get lenders to grant loans to the buyers, the Borks exaggerated the buyers' incomes and lied about their employment status. They also omitted information about other loan obligations the buyers already had incurred.

In addition, the Borks admitted to recruiting 26 people to file false tax returns, claiming refunds of more than $154,000. The defendants provided those filers with false W-2 forms that indicated that they worked for the Borks. To carry out their tax scheme, the Borks established two shell companies.

A sentencing date for the Borks has not yet been set.