John Mendoza "presented himself as a Christian" and prayed with his victims while he was preying on them, a prosecutor told jurors in a mortgage fraud case being tried in federal court.

In a complex series of transactions that took place at the height of the subprime mortgage frenzy, Mendoza "walked away with more than $432,000" in cash while his victims were saddled with nearly $2 million in debt, Assistant U.S. Attorney Clare Connors said in her opening statement yesterday.

Mendoza's lawyer, Will-iam Domingo, told the jury that Mendoza is innocent of wrongdoing and that the crimes were committed by two mortgage company employees who have pleaded guilty and will testify against him.

Mendoza, known to his acquaintances as "Brother John," was "in the business of helping people" who were in financial distress and in danger of losing their homes to foreclosure, Domingo said.

Mendoza is charged with criminal conspiracy, mail and wire fraud, money laundering and failure to file tax returns.

The tax charges cover only the years 2004, 2005 and 2006, although Connors said Mendoza hasn't filed a return since 1981.

Connors said two witnesses in the trial will be mortgage loan officer Paula Galacgac and mortgage broker Ira Altwegg, who worked with Mendoza to submit loan applications that falsely inflated the ability of borrowers to repay the loans.

Both have pleaded guilty to federal crimes and will be sentenced later.

According to records filed by Connors, Altwegg in 2005-06 helped a woman who was earning $30,000 as "a Walmart greeter" borrow some $2 million in mortgage loans.

Altwegg "prepared and submitted false loan applications" for the woman, who eventually defaulted on the loans, according to the records.

According to attorney Domingo, Altwegg and Galacgac did not act on the instructions of Mendoza.

"There is no evidence that he told them to falsify loan applications," Domingo said.

The brokers earned commissions on mortgages they processed, and lenders were "really excited" to make loans which were then "bundled and sold as derivatives," Domingo said.

The mortgages were "stated income loans" which required little or no independent proof of the borrowers' ability to repay the debts, both Connors and Domingo said.

Galacgac took the witness stand yesterday and said Mendoza told her on two loan applications to "do what it takes" and "do what is necessary to make the loan go through."

On both loans, Galacgac said, the borrowers were supposed to occupy the homes they were buying, but other people were occupying the homes.

Galacgac is no longer a loan officer and works as "a part-time bartender," she said.

She admitted to falsely inflating the incomes of borrowers on loan applications that she submitted to lending institutions.

She said she met Mendoza in 2002 or 2003 and that he told her he was "a pastor for a Pentecostal church."

He described himself as a businessman who "helped people get out of financial debt," she said.