U.S. authorities are seeking the arrest and extradition of about two dozen Canadians they allege were involved in an elaborate loan scheme that bilked 2,000 known victims out of more than $2.7 million US.

"This case was a big fat fraud," U.S. Immigration and Customs Enforcement Director John Morton said Tuesday in Buffalo, where a 62-count grand jury indictment was unsealed charging 32 people from the United States and Canada.

The defendants, including 23 Canadians and 10 Americans, have been charged with conspiracy to commit wire fraud and conspiracy to launder money and could face up to 40 years in prison if convicted.

Investigators said victims, drawn in by newspaper ads or internet sites promising loans to people with poor credit, paid upfront fees for loans that never materialized. Investigators allege the scheme operated from around 2005 to 2011 under the direction of a woman from Ontario.

A 36-year-old woman from Windsor, Ont., Dianne Jaichon, was arrested July 1, according to the U.S. Department of Homeland Security.

'A shell game'

"The whole thing was a shell game," Morton said during a news conference with U.S. Attorney William Hochul.

The organization maintained 67 fictitious companies online which would show up in internet searches for loans for people with poor credit, Hochul said. Some of the fake companies had names similar to real financial institutions. One legitimate-looking web page highlighted by prosecutors included a picture of a glass, high-rise office building and glowing customer testimonials.

Phone calls would ring to the defendants, who instructed victims to wire a security or insurance fee to money couriers through a service like Western Union, investigators said.

"Well you can probably guess the rest of the story," Hochul said. "No sooner had the victims sent their initial security deposit when they would ultimately learn that the loan would not be forthcoming. And when the victims tried to follow up by contacting these fictitious internet sites, sometimes they would learn those sites had been closed."

In 2008, two employees at two separate grocery stores in Buffalo grew suspicious of some of the money transfers they were seeing and alerted authorities, touching off the four-year investigation.

"What we know about Western Union is you usually send money to your family, a few hundred dollars. These were larger amounts, several thousand dollars, to people who were seemingly unrelated," said Assistant U.S. Attorney Fauzia Mattingly, the case's lead prosecutor, "and so that raised the suspicions of these individuals."

All of the Americans have been arrested. Prosecutors said they would seek the extradition of the Canadian suspects, most of whom had yet to be arrested.