A disgraced SNP councillor resigned yesterday just before being warned that he faces a prison term.

Jamie Rae, 32, admitted nine charges of mortage frauds of #151,000 and fiddling #16,500 in housing benefits.

His friend, David Mc-Cabe, admitted being involved in one mortage fraud.

Rae's councillor mo-ther Agnes, 65, and his sister, Margaret Doherty, 39, were cleared of involvement in the fraud.

Co-accused Ray Wy-lie, of Salmon Inn Road, Polmont, was cleared of a mortgage and a housing benefit fraud.

Another friend of the councillor, Thomas Strang, was cleared of a housing benefit fraud.

Charges against Rae and Strang, 31, of Parkhall, Maddiston, Falkirk, of running a mail order business in gay sex videos were dropped.

Falkirk Sheriff Court heard that Rae had carried out an ''extremely complicated and in-volved'' fraud.

Depute fiscal Malcolm Stewart said that the SNP councillor for Falkirk's Laurmont ward helped friends and relatives get mortgages by deception.

The fiscal told the court that Rae gave them false references for building societies and, in some cases, pretended they actually worked for him.

Mr Stewart said that Rae even used his council's official notepaper in some of the frauds.

The fiscal told how Rae, a single man, of Pretoria Place, Bright-ons, Falkirk, helped his friend David McCabe, 25, of Northfield Cottages, West Calder, West Lothian, to get a mortage above his means.

McCabe was a 22-year-old fourth grade clerk with the Royal Bank in Broxburn, West Lothian, earning #8000.

Rae used notepaper from the Crosbie Motor Company in Grahams Road, Falkirk, to give him a ''glowing reference'' as a mechanic to the Abbey National Building Society, which gave McCabe a #36,000 mortgage.

But the fiscal rev-ealed that the bank clerk was later sacked after an internal investigation by senior auditors at the Broxburn branch. McCabe is now a business student at Stirling University.

Mr Stewart said the building societies had not lost out financially.

He said that, while Rae was working on an ice cream van, he used a man's house for ''letter drops'' to pick up mail.

The fiscal said that Rae received housing benefit of #110 a fortnight, paid to two names for the one address. He said Rae got away with that fiddle because council staff had not ''cross-matched'' the applications.

The offences happened between 1990 and 1994. Rae was an ice cream salesman when he started his series of frauds. He was elected as a SNP councillor in 1992 to the then Falkirk District Council.

Rae was re-elected to the new unitary authority of Falkirk Council.

The fiscal said the offences came to light when ''information began to circulate locally that something was not quite right as to how Rae was living''.

The councillor quit the SNP last year when the charges against him became public.

Rae's lawyer, Mr Alastair Duff, told Sheriff Andrew Murphy that Rae had quit as a councillor before he came to court yesterday.

He said: ''He has taken responsibility for his actions. He thought this was appropriate.''

Sheriff Murphy noted that Rae had previous convictions in the 1980s.

He deferred sentence on Rae and McCabe un-til next month.

The sheriff told the councillor: ''The court will be considering a period of imprisonment.''

He said he was concerned that Rae had continued his criminal activity after his election as a councillor.