Criminal Indictment Charges North Jersey Businessman With $677,000 Mortgage Fraud

Allison Tussey —  November 17, 2004 — 12 Comments

The New Jersey Attorney General announced that a North Jersey businessman and purported mortgage broker was charged in connection with allegations he concocting a mortgage fraud scheme that netted more than $677,000 in fraudulent loans and $37,000 in unearned commissions. The charges, which include various counts of theft, result from an investigation targeting allegations of mortgage fraud.

According to the Director of the Division of Criminal Justice, the State Grand Jury indictment charged Russell Mainardi, 49, Alder Avenue, Wayne, Passaic County, New Jersey with theft by deception (2nd degree) and theft by failure to make required disposition of funds received (3rd degree). If convicted on all charges, Mainardi faces up to 15 years in state prison, a fine of up to $165,000, and financial restitution.

The State Grand Jury indictment alleges that between Oct. 1, 1997 and Feb. 18, 2000, Mainardi maintained a business relationship with Germain Financial Services by operating branch offices located at 1310 Hamburg Turnpike, Wayne, New Jersey and 560 Route 23, Pompton Plains, New Jersey. The indictment charges that Mainardi, who is not a licensed mortgage broker, falsified at least six mortgage applications submitted to two financial lending institutions – Option One and SLM Mortgage Company. The investigation determined that the mortgage applications contained false information including, false verifications of employment, phony W2 documents, and forged certified down payment checks. The value of the mortgage loans funded by Option One and SLM totaled $677,700. Additionally, the mortgage companies paid $37,741 in commissions to Germain Financial Services which were cashed by Mainardi, who retained the monies for personal use.

“The indictment alleges that the defendant stole nearly three-quarters of a million dollars in mortgage money from financial lenders who believed the applications were authentic. The Division of Criminal Justice is targeting unscrupulous individuals in the mortgage industry who endeavor to defraud the marketplace and who jeopardize the financial security of lending institutions”

- Vaughn L. McKoy, Director, Division of Criminal Justice

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12 responses to Criminal Indictment Charges North Jersey Businessman With $677,000 Mortgage Fraud

  1. I am familiar with this case. Mr. Mainardi plead out to income tax evasion due to the years and cost of fighting this. It was 2 loan officers in his office that committed the crime. Mr. Mainardi, as owner of the company, was help accountable as “he should have known” according to the government. No fines were imposed. Just 10 months in prison. It is behind him now. Failure to file income taxes for 1999 and part of 2000 for one of his 3 busineses was the charge, not as you read.

  2. Mr. Mainardi accepted responsibility for his company’s actions. As an owner of a company, the government requires you to do so. Kudos to Mr. Mainardi! The Indictment was dropped and he plead out to failure to file income taxes. That, they do not report!

  3. Mainardi operated for years as an unlicensed lender in violation of NJ law at numerous locations and defrauded the public. He pleaded guilty to mortgage fraud & tax evasion, but was only sentenced for the tax evasion in the plea to avoid a lengthy jail term that may have been a possibility if he went to court. The FBI did an excellent job in at least getting one more criminal off the street for 10 months although it should have been more.

  4. Augie Palladino January 3, 2012 at 10:03 pm

    Russell Manardi is a fraud he takes money for property inspections and you will never hear from him again. This guy is a loser in the worse way.

    • I worked for Mr. Mainardi and always thought that he was not handled as he should have been. He was a hard money lender from years ago and did good for many people. Unfortunately, this is a business where so many people create information and to decipher it is a massive effort. First you must inspect the property to see if actually exists. Many lenders know what I refer to. Non existent properties, false documentation and information. As with all lenders, guidelines are put in place to get through the due diligence process. Some lenders charge up to $5,000.00 or more. We never charged a due diligence fee. We did, in some cases, charge an inspection fee which was disclosed during the initial conversation. Unfortunately, there are those who feel that you should take their word. No one did, for if you accepted their word, in almost all cases, the loan defaulted. We had a great success rate, then the market dropped off due to the economy.

      • The market didn’t drop off due to the economy, real estate fraud like this crashed the economy. Get your cause & effect straight.

  5. Russell Mainardi is a big fraud. Everything he has ever done and most likely will do is underhand and dirty!! I have known him and of him for over 30 years and have never known him to do an honest thing in all those years. As for the people in his office doing the dirty deed…BULL!!

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