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A Wakefield man was sentenced last week for his role in a decade-long mortgage fraud scheme that led to $4.3 million in losses for lenders.

Joseph Bates III, 42, was sentenced in Boston federal court to 18 months in prison and three years of supervised release, according to a statement from the U.S. attorney’s office. Bates had pleaded guilty more than four years ago to one count of conspiracy, three counts of wire fraud affecting a financial institution and two counts of bank fraud. Bates was also ordered to pay restitution in the amount of $2,238,354 and forfeiture of $700,000.

Bates was charged in September 2018 along with co-defendants George Kritopoulos and David Plunkett and pleaded guilty in October 2018.

According to the U.S. attorney’s statement, Kritopoulos, Bates and others engaged in a scheme between 2006 and 2015 to defraud banks and other financial institutions by causing false information to be submitted to those institutions on behalf of borrowers primarily located in Salem.

The properties involved in the scheme were usually multi-family buildings with two to four units that had been converted into condominiums. Kritopoulos recruited borrowers to purchase the individual condominium units and finance them by mortgage loans obtained by fraud, according to the statement.

Kritopoulos and Bates together created and provided false documents to lenders to obtain financing for the purchases, according to the statement. Kritopoulos also recruited Plunkett to prepare false tax returns in support of the fraud scheme.

The false information submitted to lenders included employment, income and assets, and intent to occupy the property.

According to the statement, borrowers said they were employed by entities that were really shell companies used in the scheme, but the borrowers received little or no income from the entities. The loan applications overstated borrowers’ true income and indicated that the borrowers planned to live in the properties being purchased, when they did not intend to do so, the statement said.

Because the borrowers did not have the financial ability to repay the loans, they defaulted on their loan payments in all but two instances among 21 properties, the statement said, resulting in foreclosures and losses to the lenders.

Kritopoulos was sentenced in October 2022 to four years in prison and two years of supervised release after being 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.

Plunkett pleaded guilty in 2019 to one count of bank fraud and one count of aiding in the submission of false tax returns. He is scheduled to be sentenced this month.