SALEM — A Lynn accountant and former assistant register of deeds in Essex County pleaded guilty Monday in federal court to taking part in a decade-long mortgage fraud scheme involving a dozen properties in Salem. 

David Plunkett, 53, was charged last year along with developer George Kritopoulos, 46, of Salem and Joseph Bates III, 38, of Lynnfield, in a scheme to purchase apartment houses in Salem and convert them to condos, using fraudulent financial information supplied to mortgage companies.

Plunkett's role in the scheme involved creating phony tax returns and submitting letters to lenders with false financial information about the borrowers. 

He pleaded guilty to one count each of bank fraud and aiding in the filing of false tax returns before U.S. District Court Judge Richard Stearns, under a plea agreement reached with prosecutors last May. 

He faces sentencing June 25. 

Bates also pleaded guilty to charges including conspiracy, wire fraud and bank fraud in October. 

Kritopoulos is still awaiting trial in the case. 

Between 2006 and 2015, the three were involved in recruiting buyers for various properties who would qualify for mortgages based on fraudulent information, according to prosecutors.

Then, the properties would be converted to condos, which in turn would be sold to others, who also obtained mortgages with fraudulent information. 

Some of that information included false representations of the borrowers' employment, income, assets and whether they would live in the unit (a requirement of some loan programs) or be a landlord, prosecutors said. 

To accomplish this, shell companies were set up as "employers" for the borrowers, prosecutors said. 

Plunkett created tax returns for some borrowers with false or inflated income, which were used to qualify for loans, prosecutors said. He also signed off on letters saying that his Lynn CPA firm had prepared tax returns for the shell companies — returns that did not exist. 

Many of the borrowers defaulted on loan payments, costing banks millions of dollars in foreclosures, prosecutors said. 

Plunkett remains free on personal recognizance pending sentencing.  

Essex South Register of Deeds John O'Brien said on Monday that Plunkett, who is also a nephew by marriage, informed him of the charges and resigned in June. 

State records show Plunkett's license as a CPA remains active. 

Courts reporter Julie Manganis can be reached at 978-338-2521, by email at jmanganis@salemnews.com or on Twitter at @SNJulieManganis. 

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