Federal authorities arrested five people Wednesday who were allegedly involved in an Orange County-based "builder bailout" mortgage fraud scheme, including one defendant from Huntington Beach, according to a press release by the Department of Justice.

The group allegedly fraudulently purchased more than 100 properties across the United States from builder-owners that were struggling to sell units.

The defendants told the builders they would sell the properties in return for a large commission up front, according to the release.

Maher Obaji, 26, of Huntington Beach, was charged with conspiring to commit bank and wire fraud. Additionally, he was charged with six counts of wire fraud.

Obaji pleaded not guilty Wednesday afternoon and was released later that day on bond.

A trial is scheduled for March 5 for the defendants.

His lawyer, Craig Wilke, had no comment about his client's indictments.

The others arrested include Aref Abaji, 31, of Aliso Viejo; Jacqueline Burchell, 52, or Orange; Mohamed Salah, 37, of Mission Viejo; and Mohamed El Tahir, 35, of Glen Burnie, Md.

Wajieh Tbakhi, 48, of Corona, is a sixth defendant and is still being sought by federal authorities.

To obtain the properties, the defendants "allegedly prepared loan applications with false information" and "allegedly submitted fabricated and altered W-2 forms, pay stubs and bank statements in support of those applications," according to the press release.

The commissions received by the defendants were allegedly hidden from lenders after they were omitted from HUD-1 Settlement Statements.

Lending institutions involved lost at least $6.2 million after the loans defaulted and properties foreclosed, while Freddy Mac and Fannie Mae lost at least $2.37 million as well.

anthonyclark.carpio@latimes.com

Twitter: @acocarpio