Floyd Irons Pleads Guilty, Faces Prison and Up to $1 Million Fine

Former Vashon High School basketball coach Floyd Irons pled guilty today to one federal count of wire fraud and one federal count of mail fraud stemming from a mortgage scam.

Jennifer Silverberg
Irons, a past principal of his alma mater, Vashon High School, and its boys' basketball coach for more than three decades, faces up to 30 years in prison and a fine of up to $1 million, according to the plea agreement he signed.

As part of his deal with federal prosecutors, Irons has agreed to supply information to the Missouri State High School Activities Association regarding recruiting and other eligibility violations. A 2006 Riverfront Times investigation found that Vashon apparently fielded teams with at least three ineligible players -- and sometimes as many as ten -- each and every season from 1998-'99 through the 2005-'06 school year.)

"This will allow us to tie up some loose ends that you found when you did your story," says MSHSAA executive director Kerwin Urhahn. "The U.S. Attorney's office has told us they have information that we would be interested in as far as violations of our rules and policies. I don't know what that information is yet. We've had to wait until this plea agreement could be finalized."

Irons' attorney, Rick Sindel, did not immediately return a phone call for comment.

Local restaurateur and mortgage broker John Mineo Jr. pled guilty to one count of mail fraud in connection with the mortgage-fraud scheme. Like Irons, he faces up to 30 years in prison and a fine of up to $1 million.

A third participant alleged to be involved in the scheme, identified in court documents as "John Doe," has not been charged.

"Doe" is described in court papers as having "operated a development company, and also operated the not for profit Best of the Midwest Youth Foundation."

Incorporation papers filed with the Missouri Secretary of State indicate that Best of the Midwest Youth Foundation (formerly known as Best of Midwest Basketball Foundation) is operated by Michael Noll, of Chesterfield. Noll registered the nonprofit with the Secretary of State in 2004. Floyd Irons joined its board of directors in 2005, according to the organization's annual report, also filed with the Secretary of State.

According to the court documents, Irons and "Doe" devised a plan to purchase residential real estate at inflated prices. The pair purchased a total of three homes in 2005 and 2006 -- one in Tower Grove East, one in De Mun and the third in Wildwood. The men obtained loans by submitting false paperwork in Irons' name, and with mortgage broker Mineo's assistance received a total of $120,000 in kickbacks.

Soon after buying the homes, Irons and "Doe" put them up for sale. All the properties were eventually foreclosed upon when Irons and "Doe" failed to make mortgage payments.

In one 2005 transaction not involving Mineo, Irons and "Doe" used Irons' son, Altonio, as a "straw purchaser" of a brownstone "Doe" owned in Lafayette Square. In June 2005 "Doe" bought the home for $135,000. Five months later Altonio Irons purchased it from "Doe" for $167,000. Though Altonio Irons was attending the College of the Ozarks near Branson at the time, his father submitted a false loan application stating that Altonio planned to live in the house full-time and was employed by Best of the Midwest Youth Foundation, where he was earning almost $5,000 a month. The loan was approved.

City real estate records show that Michael Noll of Chesterfield purchased the Lafayette Square home in June 2005, then sold it five months later to Altonio Irons.

A spokeswoman for the U.S. Attorney's office would not comment on the identity of "John Doe" or say whether further charges might be pending, except to point to the plea agreements, which indicate that the investigation continues, and that both Irons and Mineo have agreed to cooperate in that effort.

Sentencing for the pair is set for November 29. For details of the charges against Irons and Mineo, click on the thumbnail below.

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Additionally, the press release issued late this afternoon by the U.S. Attorney's office appears after the jump.

-Kristen Hinman

September 20, 2007
For Immediate Release
FLOYD IRONS, FORMER VASHON HIGH SCHOOL COACH, PLEADS GUILTY TO FEDERAL MORTGAGE FRAUD CHARGES

St. Louis, Missouri: Irons, and John Mineo, Jr., a local restaurant operator, pled guilty to wire and mail fraud charges in connection with a million dollar mortgage fraud scheme, United States Attorney Catherine L. Hanaway announced today.

"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 Hanaway.

Both defendants have agreed to cooperate in this ongoing investigation. As part of his plea agreement, Mr. 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 rules 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 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 $3,891in 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 in 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."

Irons, 60, 7400 block of Augusta, St. Louis, pled guilty to one felony count of wire fraud and one felony count of mail fraud.

Mineo, 47, Valley Oak Estate Court, St. Louis, pled guilty to one felony count of mail fraud.

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.

Hanaway commended the work on the case by the Federal Bureau of Investigation, the Department of Housing and Urban Development Inspector General, Internal Revenue Service Criminal Investigation, and Assistant United States Attorney Hal Goldsmith, who is handling the case for the U.S. Attorney's Office.



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