Thursday, April 1, 2010

Mortgage Fraud Leader Sentenced to Nearly 17 Years in Prison

Mortgage Fraud Scheme in Phoenix Resulted in $9.5 Million Loss
PHOENIX—Mario G. Bernadel, 51, a citizen of Haiti, was sentenced today to nearly 17 years in prison for his conviction on multiple counts for leading a mortgage fraud scheme in Phoenix that cost banks over $9 million.
Bernadel was found guilty by a jury in September 2009 on 19 counts related to mortgage fraud, including mail, wire, and bank fraud, and transactional money laundering. Bernadel led a two-year conspiracy involving the purchase of 37 properties using fraudulent loan documents and receiving cash back at closing. Seven co-conspirators were also charged and have pleaded guilty for their involvement in the conspiracy and many will be sentenced in the next few months.

Dennis K. Burke, U.S. Attorney for the District of Arizona, highlighted the significance of this sentence. “Mortgage fraud is a top priority for the U.S. Justice Department in the District of Arizona, where it has destroyed property values, lending institutions, and entire neighborhoods in our community. No question, complex fraud schemes—a prime example, here—played a role in crashing our real estate market. Culprits like these defendants will be tracked down, prosecuted and convicted. I congratulate the FBI for their thorough investigation that led to this significant sentence.”

The case against Bernadel and seven others was based on an investigation by the Federal Bureau of Investigation, which revealed that from December 2005 through March 2007 they conspired to commit mortgage fraud in Phoenix. Bernadel and others fraudulently submitted mortgage loan applications, on behalf of straw buyers, under false pretenses, obtaining and disbursing the proceeds of fraudulently obtained loans, including directing portions of the proceeds to bank accounts in Bernadel’s and other defendants’ control. Bernadel prepared or directed others to prepare fraudulent loan applications misrepresenting salary, assets and liabilities. Bernadel used the proceeds from the fraud to live a lavish lifestyle including purchasing several expensive homes and luxury vehicles. Evidence presented at his sentencing demonstrated that he continued to engage in mortgage fraud while in custody after his conviction. The conspiracy resulted in a loss to lending institutions of approximately $9,500,000.

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