STATEN ISLAND, N.Y. - A 72-year-old Tottenville woman and her two sons who ran a yellow school bus fleet contracted by the city have been charged in a multi-million dollar bank and tax fraud scheme.

On Thursday, federal prosecutors in Brooklyn announced the indictment of Laraine Castellano, 72, and her sons, Thomas and Dennis Scialpi, 51 and 44, who were executives at USA United Holdings Inc., a conglomerate of bus companies that did $310 million in business with the city from 2004 to 2011.

Those companies took out two loans in 2004 and 2007 for a total of $14 million, purportedly to create an employee stock ownership plan for non-union workers, prosecutors allege in their indictment.

Except the employees never found out such a fund existed, and never received any money from it, and the bus companies wound up defaulting on the loans, prosecutors allege.

Thomas Scialpi was living on Staten Island in 2007 when he and his wife took out another fraudulent loan, for more than $700,000 to pay for a yacht, prosecutors allege. He's since moved to Saddle River, N.J.

He directed a man not identified in the indictment to create false corporate income tax returns for one of the bus companies, United Tom Tom -- including a document that claimed, falsely, his wife worked for the company -- to secure that yacht loan, prosecutors allege. He allegedly defaulted on that loan as well.

Prosecutors also accuse Castellano and Thomas Scialpi of creating a labyrinth of "professional employer organizations," or employee leasing companies, to fleece the government out of more than $10 million in payroll taxes.

"Companies owned and operated by Laraine Castellano, Thomas Scialpi, and Dennis Scialpi received more than $300 million from city contracts to transport children to New York City public schools. But that was not enough for these defendants," said Acting United States Attorney Kelly Currie in a prepared statement. "As alleged, they used their companies to defraud the federal government and financial institutions of tens of millions of dollars, all to enrich themselves."

Their holding company included USA United Fleet, Inc., also known as Shoreline Fleet, Inc; USA United Transit, Inc., also known as Shoreline Pupil Transit, Inc, United Tom Tom Transportation, Inc., also known as Shoreline Buses, Inc.; USA United Bus Express, Inc., also known as Shoreline Bus Express, Inc.; and United Fleet, Inc., prosecutors said.

The holding company and its subsidiaries filed for Chapter 11, then Chapter 7 bankruptcy in July 2011, as they were embroiled in a dispute with its more than 1,100 union workers over unpaid benefits.

Published reports in 2011 numbered the company's fleet at more than 400 yellow buses.

Federal prosecutors charged the company's comptroller, William Moran, with fraud and tax evasion in June 2014, and its certified public accountant, George Silverman, with fraud this past March. Both have taken guilty pleas.

Castellano's lawyer did not return a phone call seeking comment.

Peter Tomao, who represents Thomas Scialpi, said his client has been released on bond.

"He's pled not guilty, and he's going to fight the case in court," Tomao said.

Read the full indictment below.