George Kritopoulos, Mortgage Fraud Scheme, Massachusetts 2022

A Salem, Mass. real estate developer has been sentenced to four years in prison for his role in a decade-long mortgage fraud scheme that resulted in over $3.8 million in losses to lenders. George Kritopoulos, 50, was sentenced by U.S. District Court Judge Patti B. Saris on May 27, 2022 to four years in prison to be followed by two years of supervised release. The judge reserved determination on an order of restitution.

Kritopoulos was convicted by a federal jury on May 27, 2022 of one count of conspiracy, two counts of wire fraud, six counts of bank fraud, one count of aiding the preparation of a false income tax return, and one count of obstruction of justice.

The scheme, which lasted from 2006 through 2015, involved Kritopoulos and his co-defendants, Joseph Bates III and David Plunkett, causing false information to be submitted to banks and other financial institutions on behalf of borrowers. The properties involved were primarily multi-family buildings in Salem, which were converted into condominiums and financed by mortgage loans obtained through fraud.

The false information submitted to lenders included representations concerning the borrowers’ employment, income, assets, and intent to occupy the property. Kritopoulos recruited new borrowers to purchase the individual condominium units, which were also financed by mortgage loans obtained by fraud.

As a result of the scheme, the borrowers defaulted on their loan payments in all but two instances among 21 properties, resulting in foreclosures and losses to the lenders. Kritopoulos also sought to obstruct the federal criminal investigation into the mortgage fraud scheme by encouraging Bates and Plunkett to make false statements and create false documents.

Kritopoulos was originally charged in September 2018 along with his co-defendants. Bates pleaded guilty to one count of conspiracy, three counts of wire fraud affecting a financial institution, and two counts of bank fraud in October 2018 and is scheduled to be sentenced on December 1, 2022. Plunkett pleaded guilty to one count of bank fraud and one count of aiding in the submission of false tax returns in February 2019 and is scheduled to be sentenced on December 14, 2022.

Kritopoulos’ scheme resulted in losses of over $3.8 million to lenders and involved at least two dozen loan transactions, totaling $6.5 million. Assistant U.S. Attorneys Victor A. Wild and Brian M. LaMacchia prosecuted the case.

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