Convicted Mortgage Broker Faces 30 Years in Prison for "Cash Back" Scheme

Mario Bernadel, a 51-year-old mortgage broker from Phoenix, was convicted of leading a cash back mortgage fraud scheme that resulted in approximately $20,000,000 in loans obtained by fraud and over $2,000,000 in losses to lending institutions. The scheme, which involved at least 32 residential properties in the greater Phoenix area, recruited unqualified borrowers as straw buyers, submitted fraudulent loan applications, and obtained mortgage loans in excess of the selling price of the property. Bernadel received cash back from the scheme, which he used to live a lavish lifestyle and further perpetuate the scheme.

Key Takeaways:

• Mario Bernadel, a 51-year-old mortgage broker from Phoenix, was convicted of leading a cash back mortgage fraud scheme that involved at least 32 residential properties in the greater Phoenix area.
• The scheme recruited unqualified borrowers as straw buyers, submitted fraudulent loan applications, and obtained mortgage loans in excess of the selling price of the property.
• Bernadel received cash back from the scheme, which he used to live a lavish lifestyle and further perpetuate the scheme.
• Seven other co-conspirators were also charged and have pleaded guilty for their involvement in the scheme.
• The conspiracy resulted in approximately $20,000,000 in loans obtained by fraud and a loss to lending institutions of more than $2,000,000.
• Bernadel's conviction is the 20th through "Operation Cash Back," an initiative that indicted and arrested 40 defendants, including many real estate professionals, in June 2008.
• The investigation was conducted by the Federal Bureau of Investigation and the prosecution was handled by Kevin M. Rapp and Charles W. Galbraith, Assistant U.S. Attorneys, District of Arizona, Phoenix.
• Sentencing for Bernadel is set before U.S. District Judge Stephen M. McNamee on November 30, 2009.

Statistics:

• $20,000,000: Approximate amount of loans obtained by fraud through the conspiracy.
• $2,000,000: Loss to lending institutions due to the conspiracy.
• 30 years: Maximum penalty for Conspiracy to Commit Wire, Bank, and Mail Fraud.
• $1,000,000: Maximum fine for Conspiracy to Commit Wire, Bank, and Mail Fraud.
• 40: Number of defendants indicted and arrested in "Operation Cash Back."
• 20: Number of defendants convicted through "Operation Cash Back" to date.

Sources:

• FBI Press Release
• Operation Cash Back: Initiative to Combat Mortgage Fraud and Foreclosure Rescue Schemes.