Investors Move Against Mortgage Firm : Courts: A petition for involuntary bankruptcy is filed against bank run by pair who face criminal fraud charges.

Three investors who claim they are owed more than $350,000 by two executives of a Newport Beach mortgage bank are trying to force the firm into bankruptcy, the investors’ attorney said Monday.

The investors filed an involuntary-bankruptcy petition in the hope that they will get back the money they invested with American Federal Mortgage Corp., run by David James Cook and Joseph Anthony Veltre, who are facing criminal charges in connection with an alleged fraud, according to attorney John W. Stipe.

Cook and Veltre were charged March 12 with 28 counts of grand theft stemming from an alleged mortgage investment scam that is expected to result in $3.5 million in losses for 28 investors.

The men are scheduled to be arraigned Thursday. Cook, who police consider to be a flight risk, remains in custody. The men’s attorneys could not be reached for comment Monday.

Stipe, a former attorney for the firm who said he was also duped by Cook and Veltre, said he filed the petition last week in U.S. District Court on behalf of three Orange County individuals who believed they were making a secure investment when they began doing business with the pair. One of the three claimants is Stipe’s wife, Marsha Marengo.

“This lets us start working to find assets,” said Stipe, who noted that such a petition is rare. “We think there is money out there somewhere.”

Law enforcement officials say that Cook and Veltre were especially adept at bilking investors. Court records show that several times in the past, banks and financial institutions have sought legal judgments against the men for money owed.

Marengo claims in the petition that she is owed $205,000 by American Federal.

Prosecutors say the firm fraudulently sold secured interests on home loans. In one alleged scam, investors were sold interests on a home loan in which the alleged borrower was deceased.

Stipe says he is especially enraged that Cook took advantage of their friendship.

“This guy was my buddy, and then he turned on me,” Stipe said.