It has been shown that I-124 PET imaging can be used for accurate dose estimation in radio-immunotherapy techniques. However, I-124 is not a pure positron emitter, leading to two types of coincidence events not typically encountered: increased random coincidences due to non-annihilation cascade photons, and true coincidences between an annihilation photon and primarily a coincident 602 keV cascade gamma (true coincidence gamma-ray background). The increased random coincidences are accurately estimated by the delayed window technique. Here we evaluate the radial and time distributions of the true coincidence gamma-ray background in order to correct and accurately estimate lesion uptake for I-124 imaging in a time-of-flight (TOF) PET scanner. We performed measurements using a line source of activity placed in air and a water-filled cylinder, using F-18 and I-124 radio-isotopes. Our results show that the true coincidence gamma-ray backgrounds in I-124 have a uniform radial distribution, while the time distribution is similar to the scattered annihilation coincidences. As a result, we implemented a TOF-extended single scatter simulation algorithm with a uniform radial offset in the tail-fitting procedure for accurate correction of TOF data in I-124 imaging. Imaging results show that the contrast recovery for large spheres in a uniform activity background is similar in F-18 and I-124 imaging. There is some degradation in contrast recovery for small spheres in I-124, which is explained by the increased positron range, and reduced spatial resolution, of I-124 compared to F-18. Our results show that it is possible to perform accurate TOF based corrections for I-124 imaging.