David Saks: February 2012

David Saks - Real Estate Broker - The Real Estate Mart of Tennessee, Inc. - 4040 North Watkins-Suite #4 - Memphis, Tennessee 38127 - Phone (901) 357-4663

PRISON TIME FOR VERIFICATION OF EMPLOYMENT SHAMMER

Fraudster Sent to Prison for Falsifying VOE Forms

Ronald J. O'Malley, 48, Upper Saddle River, N.J., former chairman and commissioner of the Bergen County Improvement Authority ("BCIA") and principal in a mortgage brokerage firm, was sentenced to 24 months in prison in connection with a mortgage fraud scheme that falsely claimed BCIA employment for numerous mortgage borrowers.

O'Malley was a founder and co-owner of Diversified Financial Group, d/b/a Residential Mortgage Corporation ("Residential Mortgage"), Ridgewood, New Jersey. Former Residential Mortgage employee Laura-Jean Arvelo, 52, River Vale, New Jersey, also was sentenced and received a two-year term of probation.

 

As previously reported by Mortgage Fraud Blog, both defendants previously pleaded guilty to a count of conspiracy to commit wire fraud. The defendants admitted that they conspired with each other; Residential Mortgage co-owner Edward Olimpio, 48, Boonton, New Jersey; two other Residential Mortgage employees, Daniel Gilmore, 31, Hackensack, New Jersey, and Rachell Fischbein, 30, River Edge, New Jersey; and others to commit wire fraud in connection with fraudulent mortgage and home equity loans brokered by Residential Mortgage between 2006 and 2009. Both entered guilty pleas before U.S. District Judge Dennis M. Cavanaugh, who also imposed the sentences today in Newark federal court.

According to the indictment, other documents filed in this case, and statements made in court:

The participants in the mortgage fraud scheme falsely represented on mortgage loan applications and other documents that certain borrowers were employed by the BCIA when they were not. In support of the false representations, O'Malley and his coconspirators arranged for the BCIA staff to falsely confirm the borrowers' employment to banks and other mortgage lenders calling to verify the information. O'Malley and his co-conspirators also created and arranged for the creation of false and fraudulent BCIA paystubs and W-2 forms, which were also submitted to lenders.

O'Malley and his coconspirators also made false representations regarding borrowers' employment at places other than the BCIA, and created similar false documentation in support of such claims. The coconspirators also created false asset information for borrowers, including by taking O'Malley's own bank and brokerage account statements and "cut-and-pasting" a borrower's name and address over his own. They also prepared phony leases showing fake rental income for borrowers.

In addition to the prison term, Judge Cavanaugh sentenced O'Malley to three years of supervised release and ordered him to pay a $25,000 fine.

Olimpio, Fischbein, and Gilmore previously entered guilty pleas before U.S. District Judge Susan D. Wigenton, admitting to conspiring with O'Malley, Arvelo, each other, and others to commit wire fraud in connection with the scheme. They await sentencing.

U.S. Attorney Paul J. Fishman announced the sentences.

U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Michael Ward, and IRS-Criminal Investigation, under the direction of Acting Special Agent in Charge JoAnn S. Zuniga, with the investigation.

The government is represented by Assistant U.S. Attorney Rachael A. Honig, Deputy Chief of the Criminal Division, and Assistant U.S. Attorney Christine I. Magdo in Newark.

Defense counsel: O'Malley: Justin P. Walder Esq., Roseland, N.J.; Arvelo: Joseph Rem, Esq. Hackensack, N.J.




David Saks



Time&Temp Memphis

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