Federal authorities yesterday arrested two real estate developers accused of orchestrating a mortgage fraud scheme to defraud investors of $78 million.

The developers, Michael Hershkowitz and Ivy Woolf-Turk of the Kingsland Group, both 51, are charged with forging mortgage papers to use as collateral when accepting loans from individual and corporate investors.

The developers allegedly told investors they were taking their money to finance the renovation of 16 multi-family apartment buildings in upper Manhattan, most of which are between 150th and 190th streets, according to the U.S. attorney’s office in Manhattan.

The developers promised the investors high-interest returns, but they never paid back the original loans. Court papers allege that one of the investors who loaned the developers $200,000 is now in financial difficulty.

When the investors became suspicious, the developers are said to have forged mortgage papers to appease their fears. Several investors discovered the fraud when they checked public records and saw that the developers did not, in fact, hold mortgages for the buildings, the U.S. attorney’s office said. The two face charges of conspiracy to commit mail fraud and wire fraud. If convicted, each could be sentenced to 20 years in prison.

An attorney for Woolf-Turk declined to comment. Attorneys for Mr. Hershkowitz did not return requests for comment. Kingsland Group did not return a call.