CALGARY - Police say they've uncovered mortgage fraud worth $12 million that involved 22 Calgary homes and eight banks.

Investigators say the scheme involved houses all across the city, as well as naive "straw buyers."

The buyers were allegedly convinced to use their names to obtain mortgages as an investment opportunity and were told the plan's masterminds would take them over after six months.

In return, the buyers were allegedly given between $3,000 and $5,000.

"Most of (the buyers) were fairly young as far as residential buyers, with their ages ranging from 20 to 28," said Insp. Kevin Forsen of the Alberta Law Enforcement Response Teams.

The masterminds of the plan then allegedly walked away from the mortgages, gaining a large amount of money and leaving the straw buyers responsible.

Forsen said that all the duped buyers had a connection to the alleged fraudsters.

"It wasn't that they were going out and recruiting people, these were all people who had some kind of relationship before."

The money has not been recovered, and where it ended up is still under investigation, Forsen said.

"Our hope is we can recover as much as possible, but there's a lot of work to do that. This is a very sophisticated operation."

Ali El-Sayed, 31, is charged with extortion, as well as with 23 counts of fraud over $5,000. The fraud charges also affect his company, Ramses Holdings Inc.

He has been released on $12,500 bail and conditions that include 16 no-contact orders.

Christos Fotopoulos, 28, surrendered to police Wednesday and has been charged with three counts of fraud over $5,000.

Police say an arrest warrant has been issued for Russell Kilba, 34, who is wanted on 10 counts of fraud over $5,000.

The banks involved include Scotiabank, TD Canada Trust, ATB Financial, First National Financial, CIBC, Merix Financial, Royal Bank and MCAP Financial.

Investigators say they've found no evidence the fraud is connected to an alleged massive mortgage fraud ring involving the Bank of Montreal.

RCMP have confirmed they've launched a formal investigation into that alleged fraud, which civil court documents filed by the bank suggest involved mortgages worth $70 million.

Calgary police have also charged El-Sayed in separate mortgage fraud worth $1.2 million. He faces one count of committing fraud over $5,000 in that case.