A 25-year-old woman pleaded guilty in federal court yesterday to participating in a mortgage fraud scheme and faces up to five years in prison and $250,000 in fines.

Paula Galacgac admitted that, while working as a loan officer for Mortgage Ability, LLC she recruited two "straw buyers" for properties on O'ahu and assisted them in fraudulently applying for mortgage loans worth more than $400,000.

Other members alleged to be part of the fraud conspiracy were named in a separate criminal indictment returned by a federal grand jury May 30.

Galacgac was not named in that earlier indictment.

Yesterday she pleaded guilty to conspiracy to commit mail and wire fraud and filing false statements on loan applications.

The offenses occurred between March 2004 and July 2006.

U.S. District Magistrate Judge Kevin Chang set sentencing for April 27 and released Galacgac on $25,000 unsecured bond.

At the request of the prosecutor, Assistant U.S. Attorney Clare Connors, Chang barred Galacgac from employment in the mortgage loan business while awaiting sentencing.

Galacgac admitted that she helped find homeowners who were in financial difficulties and enlisted their participation in a scheme that would allow them to "stay in their homes and in some cases enrich themselves," according to court papers.

She admitted recruiting two "straw buyers" who posed as home buyers and helped them submit false and fraudulent applications for mortgage loans.

Those two straw buyers, Albert Alimoot Jr. and Evan Koizumi, have also pleaded guilty.

Two principal defendants, John Mendoza and Antonio Alcantara Jr., have denied wrongdoing and are scheduled to go to trial in the case later.