New York Man Gets 51 Months For Vermont Fraud Scheme

admin —  March 6, 2009 — 2 Comments

Richard Shumway, 51, Brewerton, New York, was sentenced in United States District Court in Burlington, Vermont, to 51 months of imprisonment following his guilty plea to a federal wire fraud charge. Chief U.S. District Judge William K. Sessions III ordered that Shumway serve a three-year period of supervised release following completion of his prison term and pay restitution totaling $1,336,397.18. The court ordered that Shumway surrender to the Bureau of Prisons on May 5, 2009, to begin serving his sentence.

On January 3, 2008, a federal grand jury in Burlington returned a two-count indictment charging Shumway with mail fraud and bank fraud. 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 a total of nearly one million dollars from 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. Shumway was aided in this scheme by Nazzarra Bernardo of Syracuse, the owner of the title company that processed the closing paperwork on each loan and served as escrow agent.

Gerald Mullaney has already pled guilty to bank fraud and is awaiting sentencing.

Bernardo has pled guilty to conspiracy and is also awaiting sentencing.

This case was investigated by the Burlington, Vermont office of the Federal Bureau of Investigation.

Shumway is represented by Paul Volk. The prosecutor is Assistant U.S. Attorney Gregory Waples.

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2 responses to New York Man Gets 51 Months For Vermont Fraud Scheme

  1. Concerned Vermonter March 12, 2009 at 3:55 am

    I agree with Mr. Hite. It is shocking that individuals who engage in white collar crime receive much lesser sentences than those who engage in property offenses like stealing from homes or those who commit drug offenses.

    Typically white collar criminals have the benefit of an education and are well aware that their conduct is both unlawful and immoral. They’re just hoping they they won’t get caught and are counting on not being packed away in jail for a term commensurate with their crimes.

    51 mopnths for fraud involving $1.6 million is outrageous — how many lives were harmed by this conduct? And how small a penalty imposed! 51 months served consecutively for each act of fraud would be more appropriate.

    Imprisonment is believed to be a deterrent to burglars and thieves. The deterrence of significant jail time would be even more effective with White collar criminals. Let’s hope the prosecutors and judges start taking different approaches with these crimes.

    And, if sentencing guidelines are the basis for these short prison sentences, let’s get those changed.

  2. How many more thousands of people does the FBI have to investigate other than this? The media sensationalizes any other crime of theft and deception much more highly than this. I am not one for conspiracy theories but who could rationalize anything other than this thru all empirical evidence gathered so far? Some low life can steal $5000 from a “holier than thou” bank and get 15 years but this guy rips off 1.5million and gets 4 years. If he had a gram of cocaine on him he would have got life.

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