The former chairman and commissioner of the Bergen County Improvement Authority who was also a principal in the mortgage brokerage firm Residential Mortgage Corp. recently pleaded guilty for his involvement in a mortgage fraud scheme that falsely claimed company employment for numerous mortgage borrowers.
Ronald O'Malley admitted to conspiring a plan with Laura-Jean Arvelo, a former Residential Mortgage employee, to commit wire fraud in connection with fraudulent mortgage and home equity loans that were brokered by the Ridgewood, N.J.-based mortgage company between 2006 and 2009.
Edward Olimpio the co-owner of the company and employees Daniel Gilmore and Rachell Fischbein have already submitted guilty pleas to this fraudulent scheme.
According to an indictment and court evidence, the participants falsely represented on mortgage loan applications and other documents that certain borrowers were employed by and received income from the BCIA. However, these borrowers never worked for the BCIA.
In order to support the inaccurate claims that the borrowers worked at the BCIA, O'Malley and his co-conspirators told BCIA staff tell the banks and mortgage lenders that were verifying the loan documents that the borrowers did indeed work for the BCIA.
The indictment claims that O'Malley and his co-conspirators created false BCIA paychecks W-2 Forms which were submitted to the lenders too to validate the employment of the borrowers.
According to the indictment, the mortgage company also made erroneous employment representations for borrowers at other places other than the BCIA and also created false documentation to support these claims. The conspirators made bogus asset information by inserting a borrower's name into O'Malley's own bank and brokerage account statements, as well as preparing phony leases for the borrowers to claim that the nonexistent borrowers were really making an income.
All four defendants are scheduled for sentencing on Dec. 12. The conspiracy to commit wire fraud carries a maximum penalty of 20 years of imprisonment and a $250,000 fine.
