Officials say the transactions between March and May involved loans of up to $155,000 for sales at the DeKalb County complex on the eastern edge of Atlanta where actual listings average $15,000.
The seven, including mortgage brokers, a closing attorney and an employee of the Internal Revenue Service, are charged with conspiracy to commit wire fraud.
Two are not in custody. Four had $10,000 bonds set Monday pending a June 30 preliminary hearing.
The alleged ringleader, 36-year-old Dossey Richards of Atlanta, was held without bond until another hearing Friday or early next week.
Federal prosecutor Barbara Nelan told the court that two other mortgage fraud schemes had been orchestrated by Mr. Richards.
According to an FBI affidavit, Mr. Richards bought the 144-unit Blue Sky condo on Memorial Drive through his Red Hair Investment Group in March 2006 for $3.8 million, an average of $26,600 per unit. Of 25 units currently listed for sale, prices range from $2,000 to $28,750, the affidavit said.
Ms. Nelan said some of the units contained "deplorable conditions, with numerous code violations" and were on the verge of being condemned.
But according to the affidavit, a "straw purchaser," Lovie Hobbs, obtained loans of $135,000 and $155,000 for two units through phony documentation and appraisals.
A confidential informant told the FBI that one unit was actually a basement storage room that had no plumbing, cabinets or approved electrical wiring.
In addition to Mr. Hobbs, 47, an IRS employee from Lithonia, Ga., the defendants include mortgage brokers Montra McKenzie, 29, and Cyrus Davis, 42, both of Atlanta; and Michelle Davila, 35, a Wachovia Bank employee from Atlanta.
An appraiser, Rayshaun Harmon, 27, of East Point, Ga., and Marcus Vickers, 35, of Ellenwood, Ga., a closing attorney, were not in custody Wednesday, Ms. Nelan said.