The frauds involved so-called "straw buyers" — people who received a fee for agreeing to use their name and credit information to obtain mortgages on dozens of properties. Such scams have proliferated around the country in recent years, although rarely in such a high-profile location as Wednesday's bust.

The Hamptons have long been a getaway for the rich and famous, with celebrities and wealthy New Yorkers spending exorbitant amounts of money on mansions and summer rentals. Prosecutors said some of the homes that were rented to vacationers were fraudulently purchased through the mortgage fraud scheme.

The straw buyers either filled out phony loan applications claiming inflated or nonexistent incomes — in one case claiming a salary of nearly $450,000 a year — or said they were employed by corporations controlled by some of the schemers, Spota said.

One of these companies was identified as Arena Studios, Inc. a Manhattan business that at one time provided dominatrix services, the prosecutor said. Another source of straw buyers was a company called Maximum Restraint Films.