Officials are calling it one of the largest bank fraud schemes ever in their jurisdiction. Two Susquehanna County residents pleaded guilty Tuesday to trying to defraud a local financial institution of $14 million. Our Melissa Kakareka has the details.

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BINGHAMTON, N.Y. -- The Department of Justice announced a major breakthrough in its efforts to combat financial fraud in region Tuesday.

"These kinds of cases cause great financial hardship to individuals, to institutions. This is a serious matter for law enforcement and we will continue to work together to uncover it," said U.S. Attorney for the Northern District of New York Richard Hartunian.

Officials say Scott Lonzinski, 32, and his mother, Laura Conarton, 46, organized a scheme to obtain ten loans from the Broome County Teacher's Federal Credit Union between July of 2009 and February of 2011.

The pair used Conarton's prior experience as bank loan administrator to create a fake persona and numerous phony documents and statements. The goal was to make it seem as though certificates of deposit held by Lonzinski at the People's National Bank had a value equal to the loans obtained from the BCT and could be used as security for the loans.

Officials say the scheme ultimately resulted in the liquidation of the BCT, which was eventually bought by Visions Federal Credit Union

"The subjects in this case, their actions were similar to a Ponzi scheme, so they take someone's money and pay them back some interest, in reality they are only paying back a small portion of the funds that have been stolen," said Special Agent Clifford Holly from the Albany Division of the FBI.

The pair used the money to finance expenses for Lonzinski's construction business as well as other personal expenses. Bank accounts, property and automobiles have been seized to make partial restitution in the case.

"We expect the total recovery of assets fraudulently obtained to exceed $6 million, about 43 percent of the $14 million fraud," said Hartunian.

Both defendants face a maximum sentence of 30 years imprisonment and a maximum fine of one million dollars. Sentencing is scheduled for December of 2012.