The tradesman was employed by the Williams family to install their new bathroom.
He was given a set of house keys so he could complete the work while the family were away in Turkey.
But Michael Williams, 34, and wife Becca, 31, returned from holiday and noticed a crate of beer was missing, so checked their home CCTV.
The CCTV camera installed in their living room window and pointing to the drive outside - recorded explicit audio of what sounds like two people having sex.
It shows Mike arriving with a mystery woman, and later a man can be heard asking intimate sexual questions before recording X-rated noises.
Mike can then be seen leaving the house with a blonde woman - his alleged mistress.
When he discovered the footage Michael confronted the woman on Facebook - and also sent the CCTV footage to her husband.
Furious Michael, a cleaner, from Kendal, Cumbria, said: "He's not getting paid for the job because we now need a new sofa.
"It has put quite a lot of stress on the family. I was absolutely speechless and thought how low can you get.
"The whole idea was to have a friend do the work because we wanted someone we could trust.
"Becca saw red. She was absolutely fuming. She was in tears because it was a complete abuse of trust.
"The sofa is gone. There was no way we could let our kids sit on it again knowing what happened.
"We gave it away for nothing. We just wanted it out of the house as soon as possible.
"I have asked him if he had a girl round at the house and he has completely denied it all to me. But you can clearly see and hear what is going on.
"You can hear slapping noises and sex noises. It's absolutely disgusting to do that in someone else's house where children live."
Michael said he thought he could trust the plumber to be in his house alone.
He flew to Antalya with his wife Becca and their four children on September 22 for a seven-night holiday.
The £570 job was completed before the family returned home, and Mike updated the family with text messages throughout.
But he claims he noticed a crate of beer had gone missing, so checked the CCTV camera that monitors his driveway.
Cumbria Police has confirmed officers are investigating the allegations and enquiries are ongoing.
Michael said: "I watched the videos back and saw the girl arrive. She was here for a good three hours.
"You can hear them. You can hear all-sorts.
"He's denied it all."
A Cumbria Police spokesperson said: "Police were contacted on October 2. An allegation of theft of alcohol is under investigation."