Today, U.S. Attorney Philip R. Sellinger charged two former employees of a New Jersey-based residential mortgage lending organization with participating in a large-scale mortgage fraud scheme. Christopher J. Gallo, 44, of Old Tappan, New Jersey, and Mehmet Ali Elmas, 32, a US citizen who previously lived in Turkey, both pleaded not guilty in federal court before U.S. District Judge Brian R. Martinotti.
According to court records, Gallo, a former senior loan officer, and Elmas, his assistant and mortgage loan officer, allegedly colluded to alter loan paperwork in order to illegally obtain mortgage loans between 2018 and 2023.
The plan involved misrepresenting the intended use of properties in order to obtain lower mortgage rates. In a number of cases, the defendants allegedly submitted applications falsely claiming that borrowers would use the properties as primary residences, although knowing the properties were intended for rental or investment use. This misrepresentation permitted them to get loans at lower interest rates than would otherwise be applicable.
The indictment also describes how the defendants allegedly fabricated building safety and borrower financial records to obtain loan acceptance. Over a five-year period, Gallo originated more than $3 billion in loans, many of which were suspected to contain false information.
Gallo and Elmas are each facing multiple accusations, including one count of conspiracy to conduct bank fraud, eight counts of bank fraud, eight counts of making false representations to a financial institution, and one case of aggravated identity theft.
The counts of conspiracy to commit bank fraud, bank fraud, and false statements each carry a maximum sentence of 30 years in prison and a $1 million fine, or twice the amount of the offense. The aggravated identity theft allegation carries an additional obligatory two-year prison sentence.
The indictment’s counts remain accusations, and both defendants are assumed innocent until proven guilty.