Brosnac allegedly provided investors and lenders with false and fraudulent financial information concerning the investment properties, which induced loans and investments totaling approximately $16 million.

He would then allegedly divert funds from the sale of the properties to cover lease payments and expenses and to buy new properties and also allegedly received approximately $1.9 million in commissions and consulting fees from the sales of the properties, authorities said.

According to Smith, the scheme included the use of companies under the names “Commercial Concepts,” “Realty Concepts,” “BF Oil,” “Peanut Oil,” “Viper Gas,” “Sierra Oil Management,” and “NYACOR,” allegedly controlled by Brosnac and/or Pearson and based in Hanover or Dalton, Pa.; Fresno, Calif.; and/or Nevada; and accounts at banks in Scranton, Pa., and Hanover, Pa.

Peanut Oil and Sierra Oil Management filed for bankruptcy in the United States District Court in Scranton in 2008 and 2010 respectively, according to the U.S. Attorney's office.

The FBI said Pearson, operator of Peanut Oil, was charged separately with conspiracy to commit bank and wire fraud in criminal information filed in March 2011 and pled guilty in April 2011 pursuant to a plea agreement. He is awaiting sentencing before Senior U.S. District Court Judge William C. Caldwell, according to the FBI.

Brosnac and Pearson allegedly sold the investment properties to BUR-CAM, a partnership based in Altoona, Pa., and to individual investors in Placerville, Modesto, and Fresno, Calif., according to the indictment.

The commercial properties involved in the fraud were located in Sayre, Erie, and Bethel, Pa., Syracuse and Canandaigua, N.Y., Mars Hill, N.C., and Sheridan, Wyo.

Brosnac is charged with 15 counts, including conspiracy, bank fraud, and wire fraud. Under federal sentencing guidelines, he faces an estimated advisory imprisonment range of 11 to 14 years, plus fines and an order to make restitution.