A Provo man on Tuesday pleaded guilty to federal charges of running an illegal property-flipping and mortgage fraud scheme that involved several high-end homes in the upscale Riverbottoms neighborhood in Provo.

Kitchen was one of six Utahns accused in a federal indictment of raking in millions of dollars by falsely inflating the value of several homes in the Riverbottoms area, recruiting straw buyers to dupe mortgage lenders into granting loans for amounts in excess of their fair market value, and then pocketing the difference.

In January, all six had entered not-guilty pleas to four counts of mail fraud, nine counts of wire fraud and one count of conspiracy to commit mail and wire fraud. In a superseding indictment filed earlier this month, those charges were expanded to five counts of mail fraud and 13 counts of wire fraud.

Kitchen, who changed his plea on Tuesday, faces a statutory maximum sentence of up to 20 years in prison and a fine of $250,000.

"But federal prosecutors have agreed as part of the plea agreement to decrease his federal sentence for acceptance of responsibility, if he clearly demonstrates his acceptance of responsibility up to and including the time of sentencing," said Melodie Rydalch, spokeswoman for the U.S. Attorney's Office.

The other defendants include David Bolick, Steve Wells Cloward, Ron Clarke, Jeffery David Garrett and Rebecca Ann Hadlock. But the government is dropping federal charges against Hadlock because its "current evidence does not support continuing [her] prosecution," according to court documents filed Tuesday.

A five-week trial on the remainder of the case will start on Aug. 13 and will be held before U.S. District Judge Ted Stewart.

The U.S. Attorney's Office also seeks to forfeit $7.5 million jointly from Kitchen, Bolick, Cloward and Clark; and $6 million from Garrett.

"Judge Stewart [on Tuesday] did ask what the amount of restitution in the case may be, and our federal prosecutor said around $7 million at this time," Rydalch said. "He also said that figure, which will be finalized as a part of sentencing, is fluid and could go higher or lower depending on evidence."

Even though the mortgage scheme targeted between 20 and 30 homes in the Riverbottoms area, ultimately it affected the valuations of 550 homes because the scheme artificially inflated all home prices in the area, according to the Utah County Assessor's office.

Of the 550 affected homes, 460 had to have their property valuations adjusted in November 2007. That took place after 200 residents in the Riverbottoms area appealed their property tax valuations, which skyrocketed between 50 percent and 100 percent in just one year. The property valuations of most homes in other parts of Provo were up only 20 percent by comparison, said Utah County Assessor Kris Poulson.

Kitchen, in Tuesday's plea agreement, said he was introduced by Clarke in 2005 to a get-rich-quick scheme that took advantage of the then-robust real estate market in Utah.

Kitchen said he and Bolick would place several Riverbottoms properties under contract through Home Owners Group, and Clarke would enter these pending transactions into the Wasatch Front Multiple Listing Service as completed sales, or sales at artificially inflated prices in order to inflate the appraisal value.

These inflated appraisals were then used to dupe America's Wholesale Lender, American Broker's Conduit and SunTrust Mortgage into thinking that the value of the Riverbottoms properties was sufficient to protect their loan investments if the loans went into default.

Bolick, Cloward and Kitchen would then recruit straw buyers including Channel 2 sports anchor Dave Fox, Mark Atkin and Verrell Blaisdell, to buy those properties (which Home Owners did not yet own) for nearly double the price contracted by the company, according to the plea agreement.

"Clarke told me that when we closed the loans with the straw buyers at the higher price we would be 'resetting' the market and that 'perception' we created that the Riverbottoms properties were worth more would 'become reality,' " Kitchen said in Tuesday's plea.

Kitchen said he, along with Cloward, Garrett and Bolick falsely recorded down payments of hundreds of thousands of dollars at loan closings for the properties. Those closings were structured so that loan proceeds to the straw buyers would be used to close Home Owners' acquisition of the property as well as that of the straw buyers.

These flip transactions yielded several millions of dollars in inflated loan proceeds, which were used for a period of time to "pay salaries, commissions and fees" to the defendants, fund other property acquisitions and business ventures, and also make loan payments on the Riverbottoms homes. Over time, mortgage payments on the properties stopped, resulting in their foreclosure, Kitchen said.