A federal grand jury indicted a Fairfield real estate executive on mortgage fraud charges as part of the federal government's wide-ranging investigation into crimes that helped fuel California's mortgage meltdown.

In a nine-count indictment Thursday, the panel alleged that Alonzo Jackson Brown III, 44, took out loans in the names of unwitting friends and used the money to buy homes at inflated prices.

Federal prosecutors say Brown's actions caused banks to lose at least $1.5 million.

"The allegation is that he was essentially defrauding financial institutions (and) he was stealing other people's identities and damaging their credit," said U.S. Attorney Benjamin Wagner.

The indictment is one of dozens being pursued by federal prosecutors. Since June 2010, the local U.S. attorney's office has obtained 47 indictments, resulting in 40 guilty pleas and convictions, said Wagner.

One of those defendants, Leonard Bernot of Laguna Hills, pleaded guilty Thursday in Sacramento federal court to conspiracy to commit mail fraud. Bernot, 46, was part of a "foreclosure rescue" scheme that provided distressed homeowners with false promises of saving them from loss of their homes, federal prosecutors said.

Brown, meanwhile, pleaded not guilty to the charges at his arraignment before U.S Magistrate Judge Kenall Newman on Thursday.

His attorney, Ben Galloway of the Office of the Federal Defender, could not be reached.

A licensed real estate broker, Brown is the owner of several businesses, including AJB Lex Corp., JB Investments and AJB Construction.

Between 2005 and 2007, Brown took out more than $3 million in loans in the names of two friends without their knowledge, according to the indictment.

The loans were then used to purchase five homes in Fairfield, including a $1.2 million residence. Four of the five properties were owned by Brown.

Brown initially made mortgage payments but abruptly stopped, resulting in foreclosure lawsuits by the lenders, the indictment said.

During a news conference Thursday to announce the indictment, representatives from the U.S. attorney's office, the FBI, the U.S. Postal Service and the Internal Revenue Service said they believe they have made a dent in the white-collar crimes that helped fuel California's mortgage mess.

But Herb Brown, special agent in charge of the FBI's Sacramento office, conceded that investigators are "nowhere near the end of this rapidly evolving crime problem."

Wagner noted that the number of suspicious activity reports filed by local banks continues to soar in the Sacramento area.

"We have a lot of cases pending, but we are not done with charging new defendants, and we have more investigations under way," Wagner said.

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