Two former mortgage loan originators based in New Jersey are facing charges of conspiracy to commit bank fraud, as announced by the U.S. Attorney’s Office for the District of New Jersey and U.S. Attorney Philip Sellinger, according to the U.S. Department of Justice (DOJ). The announcement was made on April 24.
Christopher Gallo and Mehmet A. Elmas, a U.S. citizen who resides in Turkey, were charged by complaint with one count of conspiracy to commit bank fraud. They appeared last Wednesday before U.S. Magistrate Judge André M. Espinosa in Newark federal court and were each released on a $200,000 unsecured bond.
Gallo has been recognized as a top-producing loan originator, named Scotsman Guide‘s fourth-ranked LO in America in 2022 with a total volume at $1.175 billion for that year alone. The complaint says that Gallo and Elmas were employed by NJ Lenders Corp. at the time of the alleged offense, with Elmas working as Gallo’s assistant and as an MLO.
The DOJ announcement alleges that between 2018 through October 2023, Gallo and Elmas "used their positions to conspire and engage in a fraudulent scheme to falsify loan origination documents sent to mortgage lenders in New Jersey and elsewhere, including their former employer, to fraudulently obtain mortgage loans."
The complaint alleges that Gallo and Elmas routinely "mislead mortgage lenders about the intended use of properties to fraudulently secure lower mortgage interest rates [and] often submitted loan applications falsely stating that the listed borrowers were the primary residents of certain proprieties when, in fact, those properties were intended to be used as rental or investment properties."
The complaint further alleges that Gallo and Elmas benefited from mortgage loans approved at reduced interest rates. Additionally, the conspiracy involved the fabrication of property records, such as building safety and financial details of potential borrowers, to expedite mortgage loan approval. During the period spanning from 2018 to October 2023, the DOJ says that Gallo facilitated over $1.4 billion in loan originations.
"The conspiracy to commit bank fraud charge carries a maximum potential penalty of 30 years in prison and a $1 million fine, or twice the gross gain or loss from the offense, whichever is greatest," the DOJ stated.
Neither Gallo offered a statement before the time of publication.
"NJ Lenders is proud of its 33 years of successfully assisting homeowners with integrity and professionalism. We are fully cooperating with law enforcement and the ongoing investigation of two former employees. The actions of these former employees appear to have been coordinated to benefit them financially while taking advantage of the reputation and trust of the firm. NJ Lenders' work will continue uninterrupted as we provide the highest level of service to our clients," said Mark A. Tabakin, NJ Lenders' attorney.
