Former Bergen County Improvement Authority Chairman Ronald O’Malley pleaded guilty Tuesday to mortgage fraud.
O’Malley, while employed at Ridgewood mortgage brokerage firm Diversified Financial Group, which does business as Residential Mortgage Corporation, falsely claimed BCIA employment for numerous borrowers.
O’Malley, 48, of Upper Saddle River, and Laura-Jean Arvelo, a former Residential Mortgage employee, entered guilty pleas this morning.
According to the indictment, O’Malley, Arvelo and other Residential principals and employees falsely represented on mortgage applications and other documents that borrowers were employed by the BCIA. The group arranged for BCIA employees in on the scheme to answer calls from banks and other mortgage lenders calling to verify employment.
In addiiton, O’Malley and his co-conspirators created false BCIA paystubs and IRS W-2 forms, which were submitted to the lenders as well.
The indictment also accuses O’Malley of creating false bank and brokerage statements and “cut and pasting” a borrower’s name over his own to create false assets. He also prepared phony leases in order to show rental income for borrowers.
O’Malley pleaded guilty to one count of conspiring to commit wire fraud. He faces a maximum penalty of 20 years in prison and a $250,000 fine.
O’Malley was once a Bergen County power broker who was considered a front-runner to replace former Bergen County Democratic Organization Chairman Joe Ferriero.