SACRAMENTO, Calif. – Federal officials announced the indictment of 19 people Monday in what they call the largest “foreclosure rescue” scam in the nation, one that allegedly took in more than $12 million and affected more than 100 homes.

The mortgage-fraud case was announced at the federal courthouse in Sacramento, where a grand jury charged the defendants with mail fraud, money laundering and conspiracy to commit both.

In February, The Sacramento Bee obtained a search warrant for the case, which victimized homeowners throughout the nation.

Officials with the FBI, IRS and the U.S. Attorney’s Office say the defendants ran an “equity stripping” scam targeting people on the brink of foreclosure.

According to the indictment, the defendants “made varying misstatements,” telling homeowners they could enter a program to repair their credit, refinance their home and keep it.

The defendants paid straw buyers who took title to the homes and used those people to siphon equity out of the home, the indictment states.

Meanwhile, the homeowners paid rent to the defendants, believing it would repair their credit. After a year or less, the homeowners were left without their homes, equity or repaired credit, the indictment says.

The lead defendant in the case is Charles C. Head, who ran Head Financial Services and several other companies in Costa Mesa, Calif.

Head, reached by e-mail in February, wrote to The Sacramento Bee that allegations and falsehoods were being spread by “a few disgruntled customers.”

“This has little to nothing to do with me and the FBI/IRS has made no progress on this case at all,” Head wrote. “It’s been over 2 years without a single charge.”

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(c) 2008, The Sacramento Bee (Sacramento, Calif.).

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Distributed by McClatchy-Tribune Information Services.

AP-NY-03-24-08 1700EDT