Floyd Irons was sentenced to one year in prison for his role in a mortgage fraud scheme, according to media reports.

As previously reported by Mortgage Fraud Blog, Irons and John Mineo, Jr., a Missouri restaurant operator, pled guilty to wire and mail fraud charges in connection with a million dollar mortgage fraud scheme.

"These defendants both allowed greed to tarnish successful and noteworthy careers. Now, they are facing lengthy prison sentences and the prospect of spending many years paying back this ill-gotten money," said U.S. Attorney Catherine Hanaway.

Both defendants have agreed to cooperate in the ongoing investigation. As part of his plea agreement, Irons has agreed to provide complete and truthful information and assistance to the Missouri State High School Activities Association (MSHSAA) regarding high school athletic recruiting violations and any and all other MSHSAA violations he is aware of.

During the course of this scheme, Irons was employed by the St. Louis Public Schools. Mineo operated his restaurant and was employed as a mortgage broker at Midwest Mortgage Consultants, LLC.

According to criminal information and statements made in court during the plea, during late 2005, Irons and associate John Doe met with John Mineo, Jr. and told him of their scheme to purchase residential real estate for investment purposes. They told him that they would obtain mortgage loans for these residential purchases through him at the mortgage brokerage company where he was employed, Midwest Mortgage Consultants, LLC., for 10% or more of the home sales price to be kicked back to them. Additionally, Irons and John Doe told Mineo that Irons would be identified as the sole purchaser of these residential properties, but that Irons and John Doe were in business together, and that the mortgage loans would actually be paid by John Doe.

During November 2005, Irons and Doe agreed to have Floyd Irons' son act as a straw purchaser of a residence at 1205 Missouri Avenue, St. Louis, for a purchase price of $167,000. Doe had previously purchased the residence in June for $150,000. Irons' son, who was a full-time student, was not going to live in the residence, and it was understood that Irons and Doe would make the payments on the loans obtained to finance the purchase. Irons and Doe falsified information on the loan application in order to obtain the loan and, as a result, FMF Capital issued the loan for the purchase. As a result of this transaction, Doe's first and second mortgages were paid off, and he received an additional $5,084 on the sale. No payments were made following June 2006, and the property was ultimately foreclosed on for non-payment.

In December 2005, Mineo arranged for Irons and Doe to purchase real estate at 3138-40 Michigan Avenue for $190,000. The seller had purchased the four-family property during May 2005 for $125,000. Irons, Doe and Mineo filed a false loan application and Irons obtained a mortgage loan for $180,500 in January 2006. With Irons' and Mineo's knowledge, John Doe received a kick back of $20,000 from the sale proceeds and Mineo received $3,891 in broker fees.

Shortly after the purchase of the Michigan Avenue property, Mineo contacted John Doe, who agreed that he and Irons would purchase a property at 18433 Woodland Meadows Drive, Glencoe, Missouri, for $450,000, with $40,000 being kicked back to them from the purchase price. Irons and John Doe submitted a false loan application in Irons' name to Midwest Mortgage and obtained the loans. Mineo received $8,850 in broker fees. The property had previously sold for $240,000 in December 2004. Mineo’s company also received $23,000 from the seller's proceeds.

On January 31, 2006, one day after closing on the Woodland Meadows property, Mineo arranged for the purchase of residential real estate at 11 Arundel, St. Louis, for $830,000, with $60,000 being "kicked back" to them from the purchase price. After falsifying the loan application, Irons and Doe obtained the loans for the purchase of the Arundel property. Mineo received $5,720 in broker fees. The property had previously sold for $260,000 in 1998.

Assistant Special Agent-in-Charge Michael Kaste, St. Louis FBI stated, "The FBI has instituted a nation-wide initiative to combat mortgage fraud and aggressively pursues this type of fraudulent activity. Mortgage fraud warrants this type of emphasis because its negative effects on national and local economies, individual neighborhoods and homeowners/taxpayers can be very significant."

Each count of wire and mail fraud carries a maximum penalty of thirty years in prison and/or fines up to $1 million. Restitution is mandatory. Both defendants appeared before United States District Judge E. Richard Webber and are scheduled for sentencing on November 29, 2007.