A U.S. attorney for Connecticut has charged a Groton mortgage broker with defrauding lenders by falsifying information used to refinance his homes, fund his company and pay off debts.

On Tuesday, a federal grand jury in New Haven indicted Gary T. Johnson, 59, of Groton, former chairman of the Groton-based mortgage lender Matrix Investment Corp., on four counts of wire fraud and two counts of engaging in illegal monetary transactions while operating the former business.

Two out-of-state lenders - Greenpoint Mortgage Funding Inc., with offices in California and Massachusetts, and Flagstar Bank, based in Troy, Mich. - suffered "substantial losses" in 2005, a year after the loans were sought, as a result of the alleged fraudulent activity, the indictment states.

The Internal Revenue Service's Criminal Investigation Division and the Federal Bureau of Investigation are investigating the case.

U.S. Magistrate Judge Thomas P. Smith ordered the indictment unsealed in Hartford during Johnson's arraignment Tuesday, said Nora R. Dannehy, acting U.S. attorney for the District of Connecticut.

Jury selection begins Sept. 16 in the case, which is in U.S. District Court in Hartford before Judge Christopher F. Droney, said Tom Carson, a spokesman for Dannehy. The status of Matrix, which in 2005 had filed for Chapter 7 bankruptcy, was unclear Wednesday.

Johnson and his federal public defender, Deidre A. Murray, did not return messages left seeking comment.

According to the indictment, Matrix served as both a broker for other lenders and a loan originator when providing mortgages to borrowers.

The scheme alleged in the 13-page indictment began in June 2004 when Johnson informed some Matrix employees that he would refinance his residences at 165 Tyler Ave. in Groton and 199 Thames St. in New London in order to fund Matrix business expenses.

Johnson then secured loans, but allegedly lied on the applications, saying he earned thousands of dollars more in monthly income than he actually did.

He claimed to hold exclusive title to the Groton property, when he in fact did not have title at all, the indictment says. Also, it says, he claimed that the New London home was his primary residence when it was not. In both cases, he claimed he was using some of the money to repay pre-existing mortgages, but did not, the indictment states.

The fraud allegedly perpetuated on Greenpoint Mortgage involved a $640,000 loan and $80,000 line of credit, obtained by refinancing the Groton home. The loan was to be used to repay $541,500 of the first mortgage for the Groton home, and various other debts, the indictment states. In the fall of 2005, Johnson allegedly stopped making payments and later defaulted on the Greenpoint loan.

The loan settlements falsely representing that past liens were paid off were allegedly faxed across state lines, thus incurring the charges of wire fraud in violation of federal law.

The fraud allegedly perpetuated on Flagstar Bank involved a $563,500 loan, obtained by refinancing the New London home. In that loan application, Johnson also allegedly "markedly understated" liabilities exceeding $1.8 million by failing to report the Greenpoint loan, the indictment stated. He also allegedly failed to repay other pre-existing loans as required.

In August 2005, Johnson stopped making payments and ultimately defaulted on the Flagstar loan, the indictment states.

If convicted, Johnson faces up to 20 years in prison on each of the first two wire fraud counts, up to 30 years on each of the other two wire fraud counts, and up to 10 years on the two counts of engaging in illegal monetary transactions, Dannehy said.

p.daddona@theday.com