BOSTON (WWLP) – A Salem real estate developer was sentenced to prison on Friday in connection with a decade-long mortgage fraud scheme.
According to the Justice Department in Boston, 50-yeard-old George Kritopoulos was sentenced to four years in prison to be followed by two years of supervised release in connection with a decade-long mortgage fraud scheme involving at least two dozen loan transactions, totaling $6.5 million, that resulted in more than $3.8 million in losses to lenders.
He was convicted of conspiracy, two counts of wire fraud, six counts of bank fraud, aiding the preparation of a false income tax return, and obstruction of justice. Kritopoulos was originally charged in September 2018 along with co-defendants Joseph Bates III and David Plunkett.
From 2006 through 2015, Kritopoulos, Bates and others engaged in a scheme to defraud banks and other financial institutions by causing false information to be submitted to those institutions on behalf of borrowers primarily in Salem.
Kritopoulos brought newly recruited borrowers to Plunkett, who then prepared tax returns that contained false and inflated income. Some of those tax returns were submitted to lenders in support of the fraudulent loan applications.
Since the borrowers did not have the financial ability to repay the loans, in all but two instances among 21 properties, they defaulted on their loan payments, resulting in foreclosures and losses to the lenders.
Bates pleaded guilty to conspiracy, three counts of wire fraud affecting a financial institution and two counts of bank fraud and is scheduled to be sentenced on December 1, 2022.
Plunkett pleaded guilty to bank fraud and aiding in the submission of false tax returns and is scheduled to be sentenced on December 14, 2022.
The judge reserved determination on an order of restitution.
