Ringleader Sentenced In Sweeping Mortgage Fraud Scheme: Authorities

An Orange County man has been sentenced to more than 10 years in federal prison for leading a sweeping scheme that defrauded businesses, banks, mortgage lenders and government programs out of millions of dollars, authorities said.

Steven Tetsuya Morizono was sentenced to 121 months in prison, followed by three years of supervised release, according to the U.S. Attorney’s Office of the Southern District of Texas.

Morizono, also known as Jeff Lucian, of Mission Viejo, pleaded guilty in March to 34 counts, including conspiracy to commit bank fraud, wire fraud, mortgage fraud, conspiracy to make false statements to the Federal Trade Commission and obstruction of an official proceeding, authorities said.

The conspiracy, which dates back to 2017, has led to the convictions of 17 people, including mortgage brokers Heather Campos and Kimberli Ann Tomman, and multiple straw buyers, according to the U.S. Attorney’s Office.

“This wasn’t just paperwork fraud, this was a calculated and opportunistic nationwide scheme designed to manipulate mortgage lenders, banks and people with poor credit histories, for personal gain,” U.S. Attorney Nicholas Ganjei said in a news release about the sentencing dated Nov 5.

“These criminals exploited every opportunity — from banks to the housing market to the pandemic — to enrich themselves at the expense of taxpayers, banks, and honest Americans.”

The court heard evidence that Morizono recruited his brother-in-law, Albert Lim, also known as Ted Chen, and longtime friend David Best to participate in the scheme, according to the news release. They operated through a company called Jeff Funding, which carried out a nationwide fraud involving falsified loan applications, shell companies, straw buyers and fraudulent credit repair services connected to homes in Spring, Texas, authorities said.

The group recruited people with poor credit scores, falsely reported identity theft to inflate their credit histories and submitted fraudulent pay stubs to secure personal loans, according to the news release. Once the loans were approved, Morizono and others skimmed the proceeds, leaving clients burdened with unmanageable debt, authorities said.

They also used straw buyers to acquire homes, collecting millions in rent and coronavirus pandemic-era assistance while failing to pay the mortgages, which resulted in foreclosures, according to the news release.

During the pandemic, the group expanded its fraud to target federal relief programs, including the Paycheck Protection Program and Economic Injury Disaster Loans, submitting hundreds of falsified applications, authorities said.

Campos acted as a recruiter and mortgage broker for the scheme and managed the Jeff Funding office in Spring, according to the news release, which said she was sentenced to 94 months. Lim, who acted as the bookkeeper and created fake documents for the scheme, was sentenced to 84 months, authorities said, while Best was ordered to serve a 60-month term for setting up shell companies and acting as a straw buyer.