Two brothers face federal bank fraud charges after they allegedly lied on loan applications and then forged letters to release liens, allowing them to sell mortgaged Near West Side properties and luxury cars.

Yale and Jason Schiff allegedly forged mortgage papers and used false identities to fool banks into issuing them over $5 million in mortgages, vehicle loans and other lines of credit, according to an indictment filed by the U.S. Attorney’s Office of the Northern Illinois District.

The Schiffs then allegedly filed false letters to the Cook County Recorder of Deeds, claiming the loans had been paid in full and that the mortgages were released when, in fact, the loans and mortgages were not, according to the indictment.

Yale Schiff allegedly lied to the Recorder of Deeds and sold a property he bought in 2005 at 16 S. Aberdeen St., prosecutors said. He allegedly sold the property in 2008 for $525,000, without paying off the original loan, and kept $484,000 for himself.

He pulled off similar schemes at 910 W. Madison, 1000 W. Adams, 2057 W. Ohio and a property in north suburban Riverwoods, where he lived, according to prosecutors.

Yale Schiff was initially charged in June, and now faces 12 counts of bank fraud and two counts of ID theft, according to prosecutors.

Jason Schiff, 40, was charged in an updated indictment with three counts of bank fraud involving property mortgages and loans for luxury vehicles, including a Porche and Land Rover.

Their business associate David Izsak, 44, was charged with 11 counts of bank fraud and one count of ID theft, according to an indictment.

He allegedly participated in Schiff brothers’ scheme, and fraudulently obtained over $4 million in bank loans and sent forged letters to the Recorder of Deeds to release liens prematurely.

Izsak’s scheme involved properties at 2046 W. Race St., 2158 Grand Ave., several vehicle loans, and a loan for a $450,000 yacht he called the “Flying Lady,” prosecutors said.

The Schiffs pleaded not guilty Monday during their arraignments in Chicago, prosecutors said in a statement. Izsak, who lives in Chicago, pleaded not guilty earlier in July.

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