By KIMBERLEY HAAS
A real estate developer has been sentenced to four years in prison for his involvement in a mortgage fraud scheme involving at least two dozen loan transactions totaling $6.5 million.
The actions of George Kritopoulos, 50, resulted in more than $3.8 million in losses to lenders, according to authorities at the United States Department of Justice.
Kritopoulos, of Salem, was convicted by a federal jury 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 on May 27.
Kritopoulos was originally charged in September 2018 along with co-defendants Joseph Bates III and David Plunkett, according to a press release.
“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 – people recruited to purchase properties – located primarily in Salem. The properties were usually multi-family buildings with two-to-four units, which the conspirators then converted into condominiums,” the press release says.
Kritopoulos recruited new borrowers to purchase the individual condominium units, which were also financed by mortgage loans obtained by fraud, according to prosecutors.
The borrowers did not have the ability to pay back the loans, and the properties were foreclosed on.
Kritopoulos tried to obstruct the federal criminal investigation into the mortgage fraud scheme by encouraging Bates and Plunkett to make false statements and create false documents, the press release says.
On Oct. 21, U.S. District Court Judge Patti B. Saris sentenced Kritopoulos to four years in prison to be followed by two years of supervised release. The judge reserved determination on an order of restitution.
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