$1 Million in Mortgage Leads Stolen

Founders of Old Commonwealth stole leads from Old Merchants

April 28, 2006

By PATRICK CROWLEY

photo of Carlos Orellano

Current and former employees of a New York mortgage brokerage have been charged with stealing more than $1 million worth of mortgage leads from the firm. The case involves the alleged theft of the leads — which are used to solicit business from potential customers — from Old Merchants Mortgage of Long Island, N.Y. Carlos Orellano, 38, who works at the brokerage, has been arrested and charged with felony counts of bribery and computer tampering, according to a statement from Nassau County District Attorney Kathleen Rice. Two former employees of Old Merchants Mortgage — Neal Elbaum, 29, and Ralph Donza, 32, – face felony charges of bribery and unlawful duplication of computer related material and a misdemeanor charge of unlawful possession of personal identification information. According to Rice, Elbaum and Donza had left Old Merchants Mortgage last year to start their own mortgage company, Old Commonwealth Mortgage LLC. In July they contacted Orellano, described in the statement as an “information technology expert.”

Orellano was still working at Old Merchants Mortgage when he met with Elbaum and Donza. The pair allegedly paid Orellano thousands of dollars to gain access to Old Merchants Mortgage computer system and the company’s mortgage leads.

“Mr. Elbaum and Mr. Donza had started their own mortgage company,” Rice said in the statement. “Investigators believe that it was their intention to use the stolen information from Old Merchants Mortgage to profit Old Commonwealth Mortgage.”

In January, Old Merchants changed its computer system but “once again, it is alleged that Mr. Elbaum gained access to the new accounts,” Rice said.

Eventually Old Mortgage discovered the unauthorized access as well as Orellano’s involvement. They hired private investigators to set up a sting.

The investigators “recorded a telephone conversation between Mr. Orellano and Mr. Elbaum in which Mr. 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,” Rice said.

Old Merchants Mortgage estimated that it paid more than $1.3 million for the computer mortgage leads that were allegedly stolen. The arrests were made after authorities raided seized documents, records, computers and other equipment from the mortgage office operated by Elbaum and Donza.

photo of Neal Elbaum	photo of Ralph Donza

Patrick Crowley is a feature journalist and blogger for MortgageDaily.com. He is also a reporter, blogger and columnist for The Cincinnati Enquirer.
e-mail Patrick at: PatCrowley@MortgageDaily.com