More than a thousand people who took part in a US program to buy their 'Dream Homes' were victims of a massive $US70m ($A98.74m) fraud scheme, investigators have said.

A federal grand jury indicted four defendants and information has been filed against a fifth in what the Justice Department described as a Ponzi scheme whereby existing and aspiring homeowners were lured into dishing out at least $US50,000 ($A70,531) to make mortgage payments.

The five individuals allegedly promoted their plans under a program known as 'Dream Homes'.

On top of the $US50,000 paid by refinancing their existing homes or buying new homes at inflated prices, investors had to pay an administrative fee of up to $US5,000 ($A7,053).

The Age