Rice Charges Three in Mortgage Company Scam

Former employees steal more than $1M worth of information

MINEOLA, NY - Nassau County District Attorney Kathleen Rice announced today that Neal Elbaum, 29, and Ralph Donza, 32, were arrested today and charged with Commercial Bribing in the First Degree, a Class E Felony, Unlawful Duplication of Computer Related Material, a Class E Felony, and Unlawful Possession of Personal Identification Information in the Third Degree, a Class A Misdemeanor.  Co-defendant Carlos Orellano, 38, was also arrested and charged with Commercial Bribe Receiving in the First Degree, a Class E Felony, and Computer Tampering in the Third Degree, a Class E Felony.  The defendants have been arrested in connection with a theft of proprietary information from Old Merchants Mortgage, Inc., of Lake Success, the former employer of Mr. Elbaum and Mr. Donza and current employer of Mr. Orellano.

It is alleged that in the summer of 2005, Mr. Donza contacted information technology expert and former co-worker Carlos Orellano.  In July, 2005, Mr. Donza and Mr. Elbaum allegedly met with Mr. Orellano and Mr. Elbaum paid Mr. 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.  Mr. Elbaum and Mr. Donza had started their own mortgage company in Garden City, Old Commonwealth Mortgage, LLC., of which Mr. 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.  Mr. Orellano provided the requested information to Mr. Elbaum and Mr. Donza.

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 Mr. Elbaum gained access to the new accounts.  Old Merchants Mortgage discovered the unauthorized access and the involvement of Mr. Orellano in the theft.  They hired investigators who 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.

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.

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 office.

Two of the defendants were arraigned Saturday in First District Court, Hempstead.  Bail was set at $5,000 for Mr. Elbaum, and $2,500 for Mr. Donza.  Mr. Orellano will be arraigned today.  Along with Investigator Jesse Colon, ADA Brian Heid of the Technology Crimes Unit is handling the case for the District Attorney’s Office.  Mr. Elbaum was represented by Brian Griffin, and Mr. Donza was represented by the Legal Aid Society for purposes of arraignment.

Name: Neal Elbaum
Age: 29
Address: 217-51 Peck Avenue, Hollis Hills, NY
Charges: Commercial Bribing 1°, Unlawful Duplication of Computer Related Material, and Unlawful Possession of Personal Identification Information 3°

Name: Ralph Donza
Age: 32
Charges: Commercial Bribing 1°, Unlawful Duplication of Computer Related Material, and Unlawful Possession of Personal Identification Information 3°

Name: Carlos Orellano
Age: 38
Address: 340 Great Neck Road, Great Neck, NY
Charges: Commercial Bribe Receiving 1° and Computer Tampering 3°