Neal Elbaum, 29, Hollis Hills, New York and Ralph Donza, 32, were arrested and charged with Commercial Bribing, Unlawful Duplication of Computer Related Material, and Unlawful Possession of Personal Identification Information. Co-defendant Carlos Orellano, 38, Great Neck, New York, was also arrested and charged with Commercial Bribe Receiving and Computer Tampering. The defendants were arrested in connection with a theft of proprietary information from Old Merchants Mortgage, Inc., of Lake Success, New York the former employer of Elbaum and Donza and current employer of Orellano.

Ralph M. Donza

It is alleged that in the summer of 2005, Donza contacted information technology expert and former co-worker Orellano. In July, 2005, Donza and Elbaum allegedly met with Orellano and Elbaum paid Orellano thousands of dollars to obtain the name and access codes to a computer account in the Old Merchants Mortgage computer system, which would provide access to Old Merchants Mortgage’s leads on potential mortgage customers. Elbaum and Donza had started their own mortgage company in Garden City, New York - Old Commonwealth Mortgage, LLC. - of which Elbaum is listed as the President. Investigators believe that it was their intention to use the stolen information from Old Merchants Mortgage to profit Old Commonwealth Mortgage. Orellano provided the requested information to Elbaum and Donza.

Carlos Orellano

In January, 2006, Old Merchants’ changed their computer system used for receipt and storage of its mortgage leads and once again, it is alleged that Elbaum gained access to the new accounts. Old Merchants Mortgage discovered the unauthorized access and the involvement of Orellano in the theft. They hired investigators who recorded a telephone conversation between Orellano and Elbaum in which Elbaum admitted having access to Old Merchants Mortgage’s accounts, his concerns about getting caught, and his desire to obtain more leads from his old employer.

Old Merchants Mortgage estimates that it had paid in excess of $1.3 million for the computer mortgage leads that the defendants had unlawful access to.

Neal S. Elbaum

On Thursday, April 6, 2006 a search warrant for the defendants’ business, Old Commonwealth Mortgage, LLC. was secured by Judge Frank A. Gulotta and was executed the following day. Documents, records, computers, and related equipment were seized from the defendants’ Garden City, New York office.

Two of the defendants were arraigned Saturday, April 8, 2006 in Hempstead. Bail was set at $5,000 for Elbaum, and $2,500 for Donza. Orellano was arraigned on April 10.