September 29, 2009
APPRAISER GERALD MULLANEY SENTENCED FOR MORTGAGE FRAUD
The Office of the United States Attorney for the District of Vermont announced that Gerald Mullaney, 62, of Rensselaer, New York, was sentenced yesterday in United States District Court in Burlington to time served following his guilty plea to a charge of bank fraud. Chief U.S. District Judge Williams K. Sessions III also ordered that Mullaney serve a two-year term of supervised release and pay restitution totalling $138,373.94. As a condition of supervised release, Mullaney must serve an additional four months of home confinement and perform 100 hours of community service.
Mullaney was a real estate appraiser licensed by New York State. On November 9, 2006, a federal grand jury in Burlington returned a one-count indictment charging Mullaney with bank fraud. The indictment accused Mullaney of falsifying the appraisals he performed for about 100 mortgage loans for homes in northern New York that were financed by National City Mortgage Company. All of these loans were brokered by TSC Funding, a South Burlington-based mortgage brokerage business owned by Richard Shumway. According to court papers, Mullaney, in collusion with Shumway, falsely inflated the appraised values of the homes, and his appraisals also contained other materially false information about comparable properties and the properties for which the loans were being sought. Based in part upon the falsified appraisals, Shumway induced borrowers to take out larger mortgage loans than they needed to purchase the properties, and then skimmed off a portion of each loan’s proceeds. Mullaney pleaded guilty to the indictment on September 24, 2007.
Shumway and Nazzara Bernardo of Syracuse, New York have already been sentenced for their roles in this scheme. Shumway is currently serving a 51-month prison term. Bernardo received a sentence of time served.
This case was investigated by the Burlington, Vermont office of the Federal Bureau of Investigation. Mullaney is represented by Mary Kehoe. The prosecutor is Assistant U.S. Attorney Gregory Waples
