New York Man Gets 51 Months For Vermont Fraud Scheme

Richard Shumway of Brewerton, NY, was sentenced in U.S. District Court in Burlington, Vermont, to 51 months of imprisonment followed by three years of supervised release following his guilty plea to a federal wire fraud charge. Chief U.S. District Judge William K. Sessions III also ordered that Shumway pay $1.34 million in restitution. Shumway skimmed a total of nearly $1 million from more than 200 loans he brokered while owning and operating TSC Funding, a South Burlington-based mortgage brokerage business, 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, N.Y., 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. Nazzarra Bernardo of Syracuse, the owner of the title company that processed the closing paperwork on each loan and served as escrow agent, aided Shumway in this scheme. Mullaney and Bernardo have pleaded guilty to related charges and await sentencing.