Joseph Baumeister operated a scheme to defraud several mortgage lenders of $364,523 through his company, Prophet Development

Joseph Baumeister, 55, of St. Louis, operated a scheme to defraud several mortgage lenders of $364,523 through his company, Prophet Development, located at 50 Crestwood Executive Center in St. Louis, prosecutors said.The indictment alleges that Baumeister used straw purchasers to buy 16 residential properties based on misrepresentations to lenders. He then took money from the closings of the properties by artificially inflating the sales price or by falsely claiming that various home improvements had been made.After the closings on these properties, Baumeister allegedly found tenants for the properties, collected rent and made mortgage payments on occasion. Eventually, mortgage payments fell behind or were not made, and the majority of these properties went into foreclosure.The funds Baumeister made went to personal expenses. He is expected to appear in federal court early next week.If convicted, each count of bank fraud carries a maximum penalty of 30 years in prison and/or fines up to $1,000,000; each count of mail fraud carries a maximum penalty of 20 years prison and/or fines up to $250,000.