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Ex-BCIA chief whacked with massive mortgage fraud indictment

Photo Credit: Cliffview Pilot

A mortgage fraud scheme involving former Bergen County Improvement Authority Chairman Ronald J. O’Malley was so massive that a federal indictment against him includes 68 counts.


Ronald J. O’Malley

The indictment also names one of O’Malley’s partners at a Ridgewood mortgage brokerage firm, Laura-Jean Arvelo, 51, of River Vale.

The indictment was expected after the firm’s co-owner and a former residential mortgage employee at Residential Mortgage Corp. copped to their roles in the scheme, which they said relied heavily upon O’Malley, 47, of Upper Saddle River, to get workers at the BCIA to pretend that borrowers worked for the public agency.

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

O’Malley and Arvelo arranged for BCIA staff 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 indictment returned in U.S. District Court in Newark alleges.

O’Malley and his accused cohorts always had answers for suspicious lenders, the government says. 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.

Back in July, Edward Olimpio, 47, of Boonton, and Rachell Fischbein, 28, 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 ).

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 of last year.

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

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