NEWARK, N.J. – Two men were arraigned today on charges related to their roles in a large-scale mortgage fraud scheme, U.S. Attorney Philip R. Sellinger announced today.
Christopher J. Gallo, 44, of Old Tappan, New Jersey, and Mehmet Ali Elmas, 32, a U.S. citizen who resided in Turkey until the time of his arrest, were indicted by a federal grand jury on Oct. 24, 2024, on one count of conspiracy to commit bank fraud, eight counts of bank fraud, eight counts of false statements to a financial institution; and one count of aggravated identity theft. They appeared today before U.S. District Judge Brian R. Martinotti in Newark federal court and each pleaded not guilty.
According to documents filed in this case and statements made in court:
Gallo and Elmas were previously employed by a New Jersey-based, privately owned licensed residential mortgage lending business. Gallo was a senior loan officer and Elmas was a mortgage loan officer and Gallo’s assistant. From 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. Gallo and Elmas routinely mislead mortgage lenders about the intended use of properties to fraudulently secure lower mortgage interest rates. Gallo and Elmas 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. By fraudulently misleading lenders about the true intended use of the properties, Gallo and Elmas secured and profited from mortgage loans that were approved at lower interest rates.
The conspiracy also included falsifying property records, including building safety and financial information of prospective borrowers to facilitate mortgage loan approval. Between 2018 through October 2023, Gallo originated more than approximately $3 billion in loans.
The charges of conspiracy to commit bank fraud, bank fraud, and false statements to a financial institution each carry 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 aggravated identity theft charge carries an additional consecutive mandatory minimum term of two years in prison and a maximum fine of up to $250,000, or twice the gross gain or loss from the offense, whichever is greatest.
U.S. Attorney Sellinger credited special agents of the FBI, under the direction of Acting Special Agent in Charge Nelson I. Delgado, and special agents of the Federal Housing Finance Agency, Office of Inspector General, under the direction of Special Agent in Charge Robert Manchak, with the investigation leading to the indictment.
The government is represented by Assistant U.S. Attorney Shontae D. Gray of the Economic Crimes Unit in Newark.
The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.
