Christopher Gallagher, 34, Philadelphia, Pennsylvania, was indicted in connection with a mortgage fraud scheme involving properties valued at more than $1.5 million.
“Many people lost their homes because of this scheme and many more are still struggling to keep up with expensive mortgages they just can’t afford,†said United States Attorney Pat Meehan
Gallagher was the manager and supervisor of a mortgage brokerage company located on 7th Street in downtown Allentown, Pennsylvania.
Gallagher worked in close contact with Patrick Balf, who worked as a real estate agent at The Real Estate Center, located in the same building as Gallagher’s Mortgage Access Center. Gallagher employed Donald Stone to handle various clerical duties at the Mortgage Access Center, as instructed by Gallagher. Balf and Stone have already been convicted and sentenced to prison.
The indictment alleges that Gallagher intentionally targeted houses in a limited area of downtown Allentown, Pennsylvania for potential buyers which were referred by Patrick Balf. These buyers were “subprime†borrowers. “Subprime†borrowers are individuals with damaged credit who are unable to obtain financing from banks and other finance companies at the lowest market rates, leaving them with few options in the mortgage lending market. The majority of the buyers involved in the scheme were Hispanic.
Gallagher, together with Balf and Stone, falsified loan documents submitted to mortgage lending companies to make it appear that the buyers met underwriting criteria set by those companies. For example, the defendant falsified documents listing the employment history of buyers, verifying the income of buyers, and detailing the amount and origin of cash used to purchase the houses.
The defendant referred to the process of falsifying these documents as “creative financing.†The result of the scheme was that the defendant made it appear that otherwise unqualified buyers were qualified for mortgage financing. The scheme lasted from 1998 through 2003 and involved several hundred transactions.
“They called it ‘creative financing’ but we call it fraud,†Meehan said. “These cases are about protecting our neighborhoods. If we can help to keep people in their homes, we can nurture the kind of cohesive neighborhoods that are the bedrock of safe, secure communities.â€
If convicted, defendant Gallagher faces a maximum possible sentence of 62 years imprisonment, 3 years supervised release, a $800,000 fine, and a $350 special assessment. Restitution may also be ordered against the defendant.
Rachel, is there anyway to find out when the trial for the subject of the this story starts. His name is Christopher Gallagher and is being tried in Allentown PA, but my family can not find out when. I think it’s soon. This man hurt a lot of people here included members of my family. I hate that he is not in jail, working around the streets..he sings in rock band, while my uncle’s house was foreclosed on and his credit ruined. A real piece of work.
i hate the crushing fact that I love this deceitful man despite his actions and very thinly veiled expediency