A Honolulu man faces 35 years in prison and a $1.25 million fine after pleading guilty yesterday to aiding a Honolulu mortgage company accused of orchestrating a foreclosure bailout scheme that stole hundreds of thousands of dollars from banks and distressed homeowners.

Vance Yukio Inouye pleaded guilty to wire fraud and conspiracy before U.S. Magistrate Judge Barry M. Kurren. He was scheduled to be sentenced June 29 before U.S. District Judge Susan Oki Mollway.

Inouye and his wife falsified loan applications for a $10,000 fee and took out a $200,000 line of credit when the bank approved the fraudulent loan, according to court documents. Inouye used about $120,000 of the money, according to court documents.

Inouye was one of several loan officers employed by John M. Dimitrion, founder and chief executive of Mortgage Alliance LLC, and his wife, Julie A.B. Dimitrion, the firm's chief financial officer.

The Dimitrions are accused of conspiracy to commit mail fraud, wire fraud, money laundering and making false statements on loan applications to obtain $1.3 million in new loans from 2005 to 2007.

Ten people, including the Dimitrions, have been arrested and charged in the last nine months as the result of a continuing FBI investigation into mortgage fraud in Hawai'i.

Inouye agreed to aid the Dimitrions on Dec. 14, 2005, by acting as straw buyers of a house on Ka'uiki Street in 'Ewa Beach, according to court documents.

Inouye and his wife agreed to act as buyers of the Ka'uiki property and applied for an owner-occupant mortgage despite knowing they would never live in the home, according to court documents.

The homeowner thought the foreclosure bailout program was real and believed the home would be returned to him in one year.

Inouye's wife and John Dimitrion signed two loan applications with New Century Mortgage Corp. falsifying their intent to occupy the home and their financial standing and income, according to court documents.

Based on the fraudulent applications, on Dec. 15, 2005, New Century made two wire transfers totaling $299,102 to Hawaii Escrow and Title Inc.

Dimitrion paid Inouye and his wife $10,000 for their work. Inouye further converted the new equity in the home to his use by applying for a $200,000 line of credit of which he and his wife used $120,000, according to court documents.