While an investigation continues in the alleged Kentucky Derby ticket scandal involving a University of Louisville basketball coach and an Indiana ticket broker, more...

While an investigation continues in the alleged Kentucky Derby ticket scandal involving a University of Louisville basketball coach and an Indiana ticket broker, more information is emerging about the background of the individual with whom the two allegedly chose to do business.

Late last week, Steve Netherton, who reportedly worked with Louisville coach Steve Masiello and broker Scott Davis to procure premium Derby seats for last year’s event, was indicted by a federal grand jury on charges that he and others made fraudulent mortgage applications and kept a portion of the loans.

Netherton was indicted with five other individuals for allegedly defrauding Wells Fargo, Bank of America and other financial institutions by entering false employment and bank account information on mortgage applications. The group reportedly profited by over $1 million from the scheme, allegedly paying homeowners for the use of their names on the falsified loan documents. Nineteen properties are involved in the indictment, their value totaling approximately $5 million.

Netherton was also indicted on a separate charge of falsifying information to obtain $118,000 in car loans.

His name first surfaced last May in relation to charges filed by the state of Indiana against Scott Davis, owner of DerbyDeals.com and a Kentucky county magistrate. At that time, Davis was charged with attempted theft, failing to remit sales taxes and other violations, charges stemming primarily from Davis’ failure to provide 2010 Derby tickets to five customers. Davis alleged that his difficulty in satisfying his customers was related to a failed deal with Steve Masiello, assistant men’s basketball coach for the University of Louisville, whom he claimed had promised to obtain the tickets. In the course of the investigation, Masiello identified Netherton as a ticket broker who was assisting him with securing the Derby tickets

In May, Davis, filed a complaint in a Kentucky court against Masiello. The complaint asserted that Masiello had entered into an agreement with Davis to procure certain specified ticket packages for the 2010 Derby. In the suit, Davis alleged that he had provided Masiello a total of $70,000 for Derby tickets but received only $10,000 in actual tickets and a refund of another $10,000, leaving DerbyDeals.com out $50,000 and without tickets promised to irate customers.

In December, Jefferson Circuit Judge Charles Cunningham Jr. dismissed Davis’s lawsuit, citing Kentucky’s anti-scalping law in his refusal to hear the case. Kentucky law prohibits the resale of tickets above face value, but in Indiana, where DerbyDeals.com operates, resale above face value is legal.

Masiello has consistently asserted his innocence, claiming that he served only as an intermediary between Davis and Netherton. In June, he passed a police polygraph test related to the case, and Masiello himself has never faced charges associated with the scandal. However, Louisville police stated as recently as last week that their investigation is not yet closed.

For his part, Davis has claimed that all of his customers were provided with refunds or replacement tickets, and he remains confident that his charges will eventually be dismissed.

Besides the alleged mortgage scam indictment, Netherton is no stranger to the criminal justice system. He has separate state charges pending for allegedly accepting $125,000 for 2008 Ryder Cup tickets that were never produced, and a 2007 guilty plea for bilking 14 investors and other interests out of $250,000. On March 18, Netherton is scheduled to appear in Jefferson Circuit Court to face revocation of probation for his 2007 conviction.