Two of the principal defendants charged in a massive mortgage fraud scheme on Oahu apparently are among the victims of the collapse of the subprime mortgage industry — a collapse they allegedly helped hasten.

When FBI agents arrested husband and wife Lene and Atlantica Kahaunani "Nani" Tanuvasa at their Kahala mansion Thursday morning, the five-bedroom, five-bath home was not connected to electricity or phone utilities.

In federal court yesterday, Nani Tanuvasa’s mother, who is the listed owner of the home, said a generator supplies electricity to the home. She said a telephone line was installed Thursday.

Tanuvasa was seeking her release into her mother’s custody on an unsecured signature bond pending trial.

Federal prosecutor Clare Connors opposed Tanuvasa’s request because she said Tanuvasa’s mother, Jackie Fernandez, was involved in recruiting straw buyers to participate in the mortgage fraud scheme. Fernandez is not charged with any crimes in connection to the alleged mortgage fraud scheme.

Connors also said Tanuvasa could have access to large sums of money she could use to flee from prosecution because federal authorities cannot account for $330,000 she allegedly received over the course of the fraud scheme.

Tanuvasa’s court-appointed lawyer, Richard Pafundi, said his client does not even have money to supply electricity and telephone service to her home. He said Tanuvasa has had a tax lien against her since 2002 that she has not paid.

U.S. Magistrate Judge Leslie Kobayashi denied Tanuvasa’s release because she said she needs independent verification that the Kahala home has telephone service. And, she said, because the home has no reliable source of electricity, she cannot order electronically monitored home detention.

According to Honolulu property tax records, the owner of the Kahala home owes $18,062 in back property taxes. The tax liability jumps to $25,636 when the 2010 property taxes become due.

Fernandez bought the home on Elepaio Street for $2.15 million in 2007, according to property tax records.

The property was put on the market for $3.4 million in July 2009. Last month it was re-listed for $2.9 million. Then the listing dropped to $2.68 million this month. The listing was withdrawn Thursday.

Two other defendants made their initial court appearances yesterday and pleaded not guilty to conspiracy, mail fraud and making false statements on loan application charges.

Kobayashi granted pretrial release for Mary Ann Lapenia and Samantha Michel.

When Kobayashi told Lapenia she needs to surrender her passport, Lapenia’s court-appointed lawyer, Anthony Yusi, said Lapenia’s passport is in storage and that she does not have the $200 she owes to retrieve it. Kobayashi told Lapenia she has until Thursday to surrender her passport, or she will order her taken into custody.

Yusi said Lapenia will get the $200 even if she has to borrow it.

And Kobayashi told Michel she will have to find some other living arrangements while on release.

Michel’s court-appointed lawyer, Louis Ching, said his client rents a home from Jennifer Garin Miguel, one of the other defendants. The Waipahu home is one of the properties allegedly involved in the fraud scheme. The owners are the straw buyers identified in the federal indictment, according to property tax records.