Contact Us
Northern Highlands Daily Voice serves Allendale, Ho-Ho-Kus, Midland Park, Saddle River, Upper Saddle River & Waldwick
Return to your home site


Northern Highlands Daily Voice serves Allendale, Ho-Ho-Kus, Midland Park, Saddle River, Upper Saddle River & Waldwick

Nearby Towns

Breaking News: Prosecutor: New Milford Bookkeeper Swiped $200,000 From 3 Bergen Schools
DV Pilot police & fire

Former BCIA Chairman O’Malley pleads guilty to mortgage fraud scheme

Photo Credit: Cliffview Pilot

With the net closed around him, Ronald J. O’Malley, the former chairman and commissioner of the Bergen County Improvement Authority, admitted his role in a mortgage fraud scheme at a company that falsely claimed employment at the BCIA for several mortgage borrowers.

Also pleading guilty in federal court in Newark this morning was Laura-Jean Arvelo, a former employee at the company, Diversified Financial Group, which did business as Residential Mortgage.

Ronald J. O’Malley

By using bogus documents and statements to trick lenders into making mortgage loans, the pair ended up “exploiting the credibility of a public agency to enrich themselves,” said U.S. Attorney Paul J. Fishman.

All told, the pair collected somewhere in the neighborhood of from $200,000 and $400,000 in fees from 2006 through 2009, the government said.

The BCIA, a quasi-governmental body that has the power to issue debt, became a rainmaker after O’Malley took control, with its bond activities shooting from $4.3 million just seven years ago to more than $50 million as 2009.

The authority’s lawyer, Dennis Oury, pleaded guilty that same year to scheming with former Bergen Democratic Chairman Joseph Ferriero to secretly profit from a grants-writing company they created.

O’Malley, 48, of Upper Saddle River, and Arvelo, 52, of River Vale, pleaded guilty today in Newark to conspiring with one another, as well as with Residential Mortgage co-owner Edward Olimpio and two other company employees, Daniel Gilmore and Rachell Fischbein.

The pleas were expected after Olimpio, of Boonton, and Fischbein, of Hillsdale, both admitted in federal court in Newark that they schemed with O’Malley and others to submit bogus loan applications and supporting documents that falsely claimed borrowers were employed by the BCIA ( CLICK HERE FOR THAT STORY ).

Gilmore also took a plea — leaving O’Malley and Arvelo little choice but to plead out themselves rather than risk a trial in which those who’ve admitted their roles would be prepared to testify.

O’Malley and Arvelo arranged for staff at the public agency to respond to telephone calls from banks and other mortgage lenders who called to verify the claimed BCIA employment; created and arranged for the creation of bogus pay stubs and W-2 forms; and even pasted a borrower’s name and address into O’Malley’s own bank and brokerage account statements, the original indictment charges.

O’Malley and his cohorts always had answers for suspicious lenders: For instance, when a lender discovered that pages from a savings passbook had been falsified to show the borrower’s name and address rather than the account’s true owner, “O’Malley claimed that the briefcase containing his passbook had been stolen from him … and used without his knowledge to obtain a mortgage loan,” federal authorities said.

Fishman credited Special Agents of the FBI, the IRS Criminal Investigation Division, and investigators from his own office for the work leading to the pleas, secured by Assistant U.S. Attorney Rachael A. Honig, deputy chief of Fishman’s Criminal Division, and Assistant U.S. Attorney Christine I. Magdo.

Sentencings are scheduled for Dec. 12.


SUPPORT Cliffview Pilot :

{loadposition log}

to sign up for Daily Voice's free daily emails and news alerts.

Welcome to

Northern Highlands Daily Voice!

Serves Allendale, Ho-Ho-Kus, Midland Park, Saddle River, Upper Saddle River & Waldwick

Hi! You've read our articles so we know you like our reporting. To keep reading please join our mailing list.

Get important news about your town as it happens.