A man and his brother-in-law indicted in multi-state scheme.
Fraudsters were indicted and sentenced within days of each other in California and Florida, US Department of Justice officials said.
A ringleader and his brother-in-law have been indicted for their participation in a multi-state scheme involving mortgage fraud, credit repair and government loan fraud, US Department of Justice officials outlined.
Steven Tetsuya Morizono, 59, of Mission Viejo, California, and Albert Lugene Lim, 53, of Laguna Niguel, California, were set for an arraignment before US Magistrate Judge Sam S. Sheldon Wednesday afternoon. Two others -- Heather Ann Campos, 43, and David Lewis Best Jr., 58, both of Houston – are fugitives with warrants remaining outstanding for their arrest, officials added. The indictment remains sealed to others charged but not as yet in custody, officials added.
The 33-count indictment, returned March 16, alleges Morizono and Lim led the conspiracy. Using the alias Jeff, Morizono was the leader and namesake for the scheme purporting to do business as Jeff Funding, according to the charges. In reality, Jeff funding allegedly operated a multi-layered scheme to defraud mortgage lending businesses, banks, Small Business Administration and the Federal Trade Commission.
According to the indictment, it’s alleged that co-conspirators recruited clients for credit repair using the company names of KMD Credit, KMD Capital and Jeff Funding, among others. They allegedly “cleaned” their clients’ credit histories by filing false identity theft reports with the FTC.
After fraudulently inflating client credit worthiness, the co-conspirators fraudulently obtain credit cards, disaster loans and mortgages for themselves and their clients, according to the charges. They were allegedly able to accomplish this through false statements and fake documents.
Morizono and his crew maintained control of the properties purchased in their clients’ names, according to the charges. The purpose, the indictment alleges, was to build a real estate portfolio worth millions of dollars and enrich themselves with rental income.
If convicted, Morizono and Lim face up to 30 years in federal prison and a possible $1 million maximum fine.
The Federal Housing Finance Agency – Office of Inspector General, US Postal Inspection Service, Housing and Urban Development conducted the investigation with the assistance of the Federal Trade Commission Criminal Investigation. Assistant US Attorneys Kate Suh and Jay Hileman are prosecuting the case.
In a separate case, a disbarred attorney in Florida was sentenced for four years in prison for conspiring to commit bankruptcy fraud and defrauding clients of $1.3 million, according to the US Department of Justice.
James Lee Clark, 61, was sentenced to 48 months in federal prison. According to court documents, from January 2010 through February 2017, Clark, who was a licensed attorney, conspired with his paralegal, Eric Liebman, to defraud mortgage creditors and guarantors holding notes on properties in foreclosure, officials said. Clark and Liebman falsely and fraudulently represented to distressed homeowners that they would negotiate with creditors and guarantors to prevent foreclosures in exchange for the homeowners’ execution of quitclaim or warranty deeds for the properties to an entity controlled by Liebman, according to Department of Justice officials. Clark and Liebman also convinced the homeowners to pay rent or agree to sell their houses, it was suggested.
In order to continue collecting ill-gotten rents and/or profit from the property sales, Clark filed fraudulent bankruptcy petitions in the names of the homeowners to prevent the mortgage creditors from lawfully foreclosing and taking title to the properties, it was alleged.
Additionally, from January 2012 to February 2017, Clark defrauded his clients out of approximately $1.3 million, it was stated. As part of his practice, Clark acted as a trustee for clients and held their money in various bank accounts, officials described. Department of Justice officials said that instead of using the funds for the purpose intended by his clients, Clark diverted the money into his law firm’s bank accounts, and used it for personal expenses, like gambling, travel, and automobiles.
Liebman previously pleaded guilty to conspiracy to commit bankruptcy fraud, and was sentenced to 15 months’ imprisonment.
The case was investigated by the Federal Housing Finance Agency – Office of Inspector General and the Federal Bureau of Investigation. The Office of the United States Trustee for the Middle District of Florida (Tampa Division) provided substantial investigative support. It was prosecuted by Special Assistant United States Attorney Chris Poor.