American Mortgage Company, Lead Fraud, MO 2006

St. Louis, MO – American Mortgage Company and one of its representatives have been penalized for knowingly concealing the presence of lead-based paint hazards in a 14-unit apartment building sold in October 2005. The case, prosecuted under the Toxic Substances Control Act (TSCA), highlights the dangers of fraudulent practices in property sales and the potential health risks to unsuspecting tenants.

According to court documents, American Mortgage Company deliberately misrepresented the condition of the property, specifically signing a Lead-Based Paint Disclosure form falsely indicating they had no knowledge of lead-based paint or related reports. This deception occurred during the sale of the building, potentially exposing future residents – particularly young children – to the severe health risks associated with lead poisoning.

The Environmental Protection Agency (EPA) brought the charges against the company and Kent, an individual associated with the sale, on October 31, 2005. The violation centered around 15 U.S.C. §2615 of the Toxic Substances Control Act, which specifically prohibits knowingly violating regulations designed to protect the public from lead-based paint hazards. Federal law requires sellers and landlords to disclose known lead-based paint hazards and allow buyers/tenants to conduct risk assessments.

The case underscores the EPA’s commitment to enforcing regulations related to lead-based paint, a persistent public health concern. Lead exposure can cause serious health problems, including developmental delays, learning disabilities, and behavioral problems in children. Adults can also suffer health consequences from lead exposure, including cardiovascular effects, decreased kidney function, and reproductive problems.

On January 20, 2006, American Mortgage Company was sentenced to 24 months of probation and ordered to pay a $25,000 federal fine, in addition to a $125 special assessment fee. Kent received a sentence of 24 months probation and was ordered to pay a $25 special assessment. While the financial penalties represent a measure of accountability, advocates emphasize the importance of preventing such deceptive practices in the first place to safeguard public health.

This case serves as a warning to all property sellers and landlords: transparency and honest disclosure regarding lead-based paint hazards are not merely legal obligations, but ethical imperatives. The EPA continues to investigate and prosecute violations of TSCA, ensuring that those who prioritize profit over public safety are held accountable.

Key Facts

Defendant: American Mortgage Company & Kent
Location: St. Louis, Missouri
Year: 2006
Crime: Fraudulent misrepresentation of lead-based paint hazards
Statute Violated: 15 U.S.C. §2615 (Toxic Substances Control Act)
Penalties: American Mortgage Company – 24 months probation, $25,000 fine + $125 assessment. Kent – 24 months probation + $25 assessment.
Victims: Potential tenants of the 14-unit apartment building.

Source: EPA ECHO Enforcement Case Database

Related Federal Cases