Thursday, February 21, 2008
Title Company Owner Pleads Guilty to Fraud In Vermont
Nazzara Bernardo, 60, Manlius, New York, pleaded guilty in United States District Court in Burlington, Vermont, to a charge that he conspired to commit wire fraud. The Judge released Bernardo on conditions pending sentencing, which has not been scheduled.
On January 3, 2008, a federal grand jury in Burlington, Vermont, returned a two-count indictment charging Richard Shumway, who now lives in Brewerton, New York, with wire fraud and bank fraud. Shumway has pled not guilty to the indictment. Both charges stem from the activities of TSC Funding, a South Burlington-based mortgage brokerage business Shumway owned and operated in the 1990s until 2005. According to the indictment, Shumway skimmed several thousand dollars from each of more than 200 loans he brokered by means of payments taken outside of closing, without the knowledge of the borrower. As part of the scheme, Shumway arranged for Gerald Mullaney, formerly a licensed real estate appraiser in the Albany, New York area, to prepare falsified appraisals for the homes the borrowers were purchasing. This enabled Shumway to induce the borrower to take out a larger loan than necessary to buy the home, and also enabled Shumway to divert some of the proceeds of each loan to his own benefit. Shumway misled borrowers into believing the extra fees were to be paid to the lending institution to obtain a lower interest rate.
Nazzara Bernardo owned the title company that performed the title work on the mortgages that Shumway was brokering, and also served as escrow agent for the lending banks. In court, Bernardo admitted that he had conspired with Shumway to help divert some of the proceeds of each mortgage loan to Shumway without the borrower’s knowledge. Bernardo caused funds to be paid over to Shumway other than as stated in the documentation required by federal law to be given to the borrower at the loan closing.
Bernardo faces up to five years of imprisonment and a fine of $250,000 or twice the gross gain or loss, whichever is greater. The actual sentence will be determined with reference to federal sentencing guidelines.
Gerald Mullaney has already pled guilty to bank fraud and is awaiting sentencing.
mortgage fraud
Gosh as if buying a home isn’t complicated enough. I sure hope the government will get serious about imposing stricter regulations on these types of slimy, unethical practices. Maybe that will be the silver lining in the housing meltdown.
Posted by on 02/21 at 01:31 PM
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Trial coverage provided by Anne Mitchell, Crazy Fish Realty.
F. Jeffrey Miller Update - October 20, 2009
A hearing was held in Topeka, Kansas in front of Judge Julie Robinson. Miller is currently being held pending his sentencing which is set for December 22nd, 2009 at 9:00 a.m.. Steve Vanatta and Hallie Irvin, Miller's codefendants, will be sentenced at that time also.
Several motions were heard this week. One was a motion for Miller to be released pending his sentencing. Miller's attorney, Jeff Morris, argued that the court had dismmissed with predjudice the matter involving Miller's purchase of a commercial lawnmower, violating the court ordered monitoring agreement. He also argued that Miller was not a flight risk and should be released. This motion was denied.
Another motion heard by Judge Robinson was that of an escrow account containing proceeds from the sale of Miller's forfeited assets. This account has a balance of $143,000. Attorney Morris argued that his firm was due $100,000 for work done in the Miller matter, to date. The government argued that his 'un-itemized fees' were 'exhorbitant'. The balance of the funds, Morris argued, should be released to the Miller family to help pay for mounting household expenses.
The government argued that the 'Asset Forfeiture Provision' applies down to 'the last penny' and that 'the rights of the victims to made whole are of paramount immportance' and that no routine household expenses like Visa bills, are allowed.
Attorney Morris argues that there is more than enough assets to satisfy the jury's judgement of $2.65 million dollars. The government argues that the estimated value of his assets are only $1.4 million.
The government also stated that Miller has been paid dividends from a company Miller has an ownership interest in; Boreflex. From July, 2008 to present, Miller has been paid $330,509.30 from Boreflex, unbeknownst to the court appointed monitor.
Present in the courtroom was Todd Earnshaw. Earnshaw was indicted along with Miller and others in what is commonly referred to as 'Miller I'. That trial is scheduled to begin on January 11, 2010 in Topeka, Kansas.
More Trial Coverage
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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
