The scheme involved at least two dozen fraudulent loan transactions
Three Massachusetts men have been charged for their roles in a mortgage fraud scheme that resulted in $4.3 million in losses to lenders through at least two dozen loan transactions, according to the US Attorney’s Office for the District of Massachusetts.
In the alleged scheme, which ran from 2006 through 2015, real estate developer George Kritopoulos and Joseph Bates III conspired with others to recruit people to purchase properties and submit false information to defraud banks and other financial institutions.
The conspirators submitted phony information to lenders, including representations concerning the borrowers’ employment, income, assets, and intent to occupy the property. Borrowers allegedly used shell companies to misrepresent their employment. Authorities said that borrowers also falsely represented their incomes from those entities or substantially overstated their true income. The recruited borrowers are also alleged to have falsely represented that they intended to live in the properties.
David Plunkett, who was charged with Kritopoulos and Bates, allegedly assisted the scheme by preparing tax returns for some of the borrowers that contained false and inflated income. Some of those returns were submitted to lenders in support of the fraudulent loan applications.
Financial institutions lost more than $4.3 million after the borrowers defaulted on their payments and the properties went into foreclosure.
In addition, Kritopoulos was charged with seeking to obstruct the federal criminal investigation into the mortgage fraud scheme by encouraging others to make false statements and provide false documents. He is alleged to also have made false statements to federal investigators.
