Victims of a bankrupt Pennsylvania mortgage business call the owner's guilty plea to mail fraud Friday a "shallow victory."

Wesley A. Snyder, 71, signed a plea agreement that requires him to cooperate with the investigation into his tangled business operations and make restitution. The maximum prison sentence is 30 years.

Federal prosecutors said Snyder took in more than $65 million from 811 purchasers of his "wraparound" mortgages since 1988, but forwarded only $39 million to the banks and other institutions that provided the homeowners' financing.

The rest went for salaries, office expenses and overhead.

Snyder also defrauded 31 investors out of $3 million, the U.S. Attorney's Office said, including an elderly Lancaster County woman who lost $800,000 — most of her life's savings.

Snyder's guilty plea "makes me feel better, that he's accepted responsibility to some degree," Heather Keens of Narvon, said today. "It doesn't put money per se back into our pockets."

Keens paid off a $112,000 mortgage in 2005 only to learn in September that she owed $137,000 from a mortgage Snyder's business had taken out with another bank.

Thanks to Snyder's "diabolical thinking," Keens said, she and her husband's plans to downsize their business to enjoy a semi-retirement have been postponed, indefinitely.

Victims Ronald and Marianne Melleby of Mount Joy lost $64,000.

"In some measure, justice is being done," Mr. Melleby said today of Snyder's guilty plea, "but the whole thing is shallow."

Snyder's customers took out low-interest "equity slide down" or "wraparound" mortgages through his businesses. Generally, the customers would borrow more than what was needed to pay off their previous mortgages, then give the difference to Snyder's firms to invest.

But Snyder never used the extra money to pay down mortgages and what little he invested yielded poor results, prosecutors said; most of it went to keep his businesses afloat.

He also engaged in a pyramid scheme by using cash from new customers to pay the monthly mortgage bills of existing customers, prosecutors said. Snyder concealed documents from Pennsylvania Banking Department auditors and told his workers not to tell the examiners about the wraparound program, according to the charging documents filed Friday.

The charging documents say Snyder paid himself and his wife, Sydney, a total of $3 million in salary and collected $557,000 in office rent since 1999.

Snyder's lawyer, Emmanuel H. Dimitriou, said Thursday his client is not a rich man.

"He doesn't have properties all over the world, he doesn't have any big accounts, bank accounts... This guy lives in a very plain house in the little town of Oley," Dimitriou said.

Some customers have gone to court to try to protect their assets and limit what can be collected from them by the financial institutions that funded the original mortgages.

The primary businesses were Personal Financial Management and Image Masters Inc. of Reading. Most of their customers were in Berks and Lancaster counties.

On Friday, customers pursuing a federal class-action lawsuit amended it to accuse the financial institutions of funding a Ponzi scheme and failing to perform adequate oversight.

Six of Snyder's companies filed for bankruptcy in September, claiming a $40 million deficit.

That led to hundreds of customers learning their mortgage balances were larger than they believed and that the lenders wanted larger mortgage payments. Many who thought their mortgages were fully paid off found they still owed hundreds of thousands of dollars.

The amended complaint said the lenders failed to make sure that mortgage statements and tax forms issued to the homeowners were accurate.

The lawsuit centers on whether the homeowners will have to pay the full amount that Snyder's companies obtained from the lenders, or can subtract the amount they turned over to be invested.

Keens and Melleby still have guarded hope their prior payments will be counted.

"I'll believe it when I see it," Keens said.

(The Associated Press contributed to this report.)

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