Chris Gallo enters guilty plea in federal mortgage fraud case

Christopher Gallo, once one of the nation’s top mortgage loan officers, has pleaded guilty to conspiracy to commit bank fraud in a federal court in New Jersey, according to court filings reviewed by HousingWire.

Gallo entered the guilty plea to count one of the indictment — conspiracy to commit bank fraud — on Wednesday in the U.S. District Court for the District of New Jersey, withdrawing an earlier plea of not guilty. He remains free on bail and is scheduled to be sentenced Dec. 3. His former assistant, Mehmet A. Elmas, has a plea hearing set for Aug. 20. 

The U.S. Department of Justice (DOJ) first charged Gallo and Elmas in April 2024. The DOJ alleged that from 2018 through late 2023, they falsified loan documents to deceive mortgage lenders. They first worked at NJ Lenders Corp. and in late 2023 joined CrossCountry Mortgage. 

A federal grand jury later indicted them on one count of conspiracy to commit bank fraud, eight counts of bank fraud, eight counts of making false statements to a financial institution and one count of aggravated identity theft.

Attorneys for Gallo and the DOJ haven’t responded to HousingWire’s requests for comments. 

Prosecutors allege the pair routinely misled lenders about how borrowers intended to use properties in order to qualify for lower interest rates. According to the DOJ, Gallo and Elmas often submitted applications that falsely stated borrowers would occupy properties as their primary residences, when the homes were actually intended as rentals or investment properties.

Under a plea agreement with the U.S. Attorney’s Office for the District of New Jersey, if Gallo complies with its terms, the government has agreed not to bring additional criminal charges against him related to the described mortgage lender deception conspiracy, which ran roughly from 2022 through August 2023. Prosecutors also agreed to move to dismiss the remaining counts at sentencing.

Count one carries a maximum sentence of 30 years in prison. The statutory maximum fine is the greater of $1 million or twice the gain or loss resulting from the offense, plus interest in some circumstances. Gallo agreed that restitution is mandatory and will pay restitution for the full amount of the victims’ losses, although the judge will ultimately determine the restitution amount.

Gallo must also submit a complete and accurate financial disclosure statement within 14 days of any request. The deal includes an appeal waiver that applies if the court imposes a prison term of 18 months or less.