2 months ago

Arrest for False Impersonation Protected Property Owners from Losing Insurance

Bank Loan Fraud Attestations Can Lead to Void Insurance
Post 5120

In United States Of America v. Christopher J. Gallo and Mehmet Ali Elmas, No. 2:24-cr-00712 (BRM), United States District Court, D. New Jersey (July 16, 2025) Christopher J. Gallo (“Gallo”) and Mehmet Ali Elmas (“Elmas”) (together, “Co-Defendants”) each filed their own respective Motion to Dismiss Count Eighteen of the Indictment which charges the CoDefendants with Aggravated Identity Theft in violation of 18 U.S.C. § 1028A(a)(1).

CASE OVERVIEW

The case charged the defendants with multiple counts, including conspiracy to commit bank fraud, bank fraud, false statements to a financial institution, and aggravated identity theft.

BACKGROUND

On or about April 23, 2024, Co-Defendants were charged in a one-count criminal complaint (the “Complaint”) with conspiracy to commit bank fraud. The Complaint alleged that from around 2018 through October 2023, Gallo, as a senior loan officer at a New Jersey-based, privately owned licensed residential financial institution (the “Financial Institution”), originated more than $1.4 billion in loans for the Financial Institution. During the relevant time, Elmas was employed as a loan officer and assistant to Gallo at the Financial Institution.

A grand jury returned an eighteen-count indictment (the “Indictment”) charging Co-Defendants with Conspiracy to Commit Bank Fraud (Count One); Bank Fraud (Counts Two through Nine); False Statement to a Financial Institution (Counts Ten through Seventeen); and Aggravated Identity Theft (Count Eighteen). The defendants were charged in a one-count criminal complaint with conspiracy to commit bank fraud.

Allegations

The complaint alleged that from around 2018 through October 2023, Gallo and Elmas used their positions at a financial institution to engage in a fraudulent scheme to falsify loan origination documents to obtain mortgage loans based on false pretenses.

Aggravated Identity Theft

The government alleged that the defendants forged a letter from a property manager to facilitate loan approval, which included the property manager's electronic signature.

FRAUDULENT SCHEME

The defendants allegedly misled mortgage lenders about the intended use of properties to secure lower mortgage interest rates and falsified property records and financial information to facilitate mortgage loan approval.

LEGAL PROCEEDINGS
Motions to Dismiss

Both defendants filed motions to dismiss Count Eighteen of the indictment, which charged them with aggravated identity theft. The court denied these motions, concluding that the defendants' actions fit within the statutory definition of aggravated identity theft.

Court's Decision

The court found that the identity theft was central to the fraudulent scheme, as the defendants relied on the property manager's identity to secure the mortgage .

CONCLUSION

The court denied the defendants' motions to dismiss Count Eighteen of the indictment, and the case continues with the charges of conspiracy to commit bank fraud, bank fraud, false statements to a financial institution, and aggravated identity theft.

The “Crux” of the Alleged Fraud

The Court found the allegations in this matter go to the who element that is central to the aggravated identity theft charge. Co-Defendants' actions in securing the mortgage explicitly relied on the identity of the Property Manager; if that were not the case, one of the Co-Defendants could have signed the letter attesting to the safety of the building's balconies.

Rather, Co-Defendants forged this safety attestation from the Property Manager because the Property Manager had the authority to confirm or deny the safety of the balconies. Accordingly, the Court concluded the Co-Defendants' alleged conduct fits within the statutory definition of aggravated identity theft and constitutes the “crux” of the offense. Consequently, Co-Defendants' Motions to Dismiss Count Eighteen of the Indictment (Aggravated Identity Theft was DENIED.

ZALMA OPINION

Although I often think about insurance fraud this crime - before a false insurance claims was made - would have created a major insurance fraud if any of the facilities incurred a loss. If the false safety statement was presented to an insurer for the property the policy would be never be issued or would be void from inception. When loans are obtained based upon a false safety attestation and the insurer learned that the loans were obtained by a fraudulent safety attestation, the insurer, like the bank, was, deceived when it agreed to insure the property under false pretenses and the contracts are void.

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