Burlington, VT. -- (February 12, 2008) -- The Office of the United States Attorney for the District of Vermont announced that Nazzara Bernardo, 60, of Manlius, New York, pleaded guilty yesterday in United States District Court in Burlington to a charge that he conspired to commit wire fraud. Chief U.S. District Judge William K. Sessions III released Bernardo on conditions pending sentencing, which has not been scheduled.
On January 3, 2008, a federal grand jury in Burlington 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 today, 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.
This case was investigated by the Burlington, Vermont office of the Federal Bureau of Investigation. The investigation into this fraud continues and other persons may face charges in the future.
Bernardo is represented by Emil Rossi of Syracuse. The prosecutor is Assistant U.S. Attorney Gregory Waples.
SOURCE: The Office of the United States Attorney for the District of Vermont