Carlos Ruano Cruz, real estate agent, Kansas City, Kansas and Mary Rachel Olivarez, loan processor, Shawnee, Kansas entered guilty pleas in a U.S. District Court in Kansas to one count each of conspiracy to defraud in connection with allegations that they conspired to sell homes to illegal aliens through the FHA loan program.

In their pleas, they admitted that prior to April 5, 2000, Cruz told Olivarez he had undocumented aliens with bad Social Security numbers who wanted to purchase houses but needed loans. Cruz was a real estate agent and Olivarez was the manager of American Home Loans in Shawnee, Kansas.

Olivarez told Cruz to go ahead and try to obtain an FHA loan for an illegal alien to find out whether it could be done. After the first loan went through, Cruz kept referring illegal aliens to American Home Loans. Both Cruz and Olivarez were aware that the Social Security numbers used on the loan applications were not assigned to the illegal aliens who were applying for the loans and that the aliens were falsely claiming to be permanent legal residents of the United States. Only United States citizens and permanent resident aliens are entitled to receive FHA loans.

Cruz submitted a total of 24 fraudulent FHA loans through American Home Loan and Olivarez, totaling more than $1.4 million.

The defendants face a maximum penalty of five years in federal prison and a fine up to $250,000.