Philip Garland, 44, of 314 Pleasure Road, a land developer and home builder in Lancaster County, along with James Ballantyne, 40, of 541 Solanco Road, Quarryville, Richard Myford, 41, East Berlin, and David G. Herb, 50, New Oxford, have all pleaded guilty to the charges against them.

A fourth employee, Judy Gemmill, 45, of East Berlin, Adams County, was convicted Friday in a jury trial in federal court in Allentown.

U.S. Attorney Patrick Meehan, whose office prosecuted the case, described Garland’s group as “predatory lenders,’’ who were selling “the American dream of home ownership which quickly becomes the American nightmare when the buyers go broke.’’

“The buyers are led down a path that often ends in foreclosure and bankruptcy,’’ Meehan said.

Garland’s group “targeted unsophisticated customers,’’ Meehan said, “particularly first-time home buyers with low incomes and poor credit histories.’’

Investigators learned there were approximately 100 transactions involving undisclosed, fraudulent financial advances to homeowners that were supposed to be repaid to Garland.

The face value of the mortgage loans on these 100 properties, officials said, was in excess of $9.2 million.

“It was a sophisticated scheme targeting unsophisticated borrowers to enable them to qualify on paper for the American dream of home ownership,’’ Meehan said. “The American dream turned into a nightmare.’’

The defendants knew that many of their prospective buyers could not qualify for mortgage loans, officials said.

To help them obtain federal loans for housing developments, Garland and his employees allegedly made the home buyers appear to be qualified for the federally-insured mortgages.

According to the indictment at the time of their arrest in March 2004, the group allegedly set up two other companies that aided in the alleged scam.

One was a “charity’’ that supposedly gave financial gifts to home buyers to help them purchase homes. But, in reality, officials said, the gifts were actually loans that home buyers had to repay to Garland.

Garland Construction set up another company that falsely made it appear that home buyers were consolidating, paying off or refinancing their debt, officials said.

But once in the homes, the buyers could not pay the mortgages they never qualified for, and ended up in foreclosure, or even bankruptcy, officials said.

“We had many, many home owners who came forward with their stories of hardship,’’ said Frank Aiello, of the HUD Office of Inspector General.

“It was a number of people who were struggling, people who were very close to the line,’’ he said.

The case was investigated by the Federal Bureau of Investigation, the HUD Office of Inspector General and the U.S. Postal Inspector Service.

Garland and Myford pleaded guilty to charges in March, while Herb and Ballantyne pleaded guilty in May 2004. All five are scheduled to be sentenced later this year.

The company has built hundreds of homes in Lititz, Penn Township, West Earl Township, Conestoga Township and other county locations, as well as in Adams and York counties.