Date: 2008-03-24
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SAN FRANCISCO – United States Attorney Joseph P. Russoniello announced that Kurt F. Johnson, 45, of Sunnyvale, California, and Dale Scott Heineman, 48, of Union City, California, were sentenced on March 18, 2008 for orchestrating a nationwide debt elimination scheme. Mr. Johnson was sentenced to 25 years imprisonment and Mr. Heineman was sentenced to 21 years, 8 months imprisonment.
(Media-Newswire.com) - SAN FRANCISCO – United States Attorney Joseph P. Russoniello announced that Kurt F. Johnson, 45, of Sunnyvale, California, and Dale Scott Heineman, 48, of Union City, California, were sentenced on March 18, 2008 for orchestrating a nationwide debt elimination scheme. Mr. Johnson was sentenced to 25 years imprisonment and Mr. Heineman was sentenced to 21 years, 8 months imprisonment. The sentences were handed down by United States District Court Judge William Alsup after both defendants were convicted by a jury of multiple counts of fraud and conspiracy to commit fraud.
From 2003 to 2005, Mr. Johnson and Mr. Heineman operated as the Dorean Group from offices in Union City and Newark, California. Together they orchestrated a mortgage elimination scheme whereby fraudulent documents were recorded as part of their clients’ titles to make it appear as though mortgage lenders’ secured interests in the properties were canceled when, in fact, the corresponding mortgage and home equity loans had not been fully repaid. At the direction of the Dorean Group, some of its clients used these fraudulently-generated “free and clear” titles to obtain hundreds of thousands of dollars in new home equity loans from lenders who were led to believe that the properties were unencumbered by loans. Clients who obtained new loans paid 50-75% of the funds to the Dorean Group. At least 20 lenders and as many as 3,500 homeowners throughout 35 states were victimized by Mr. Johnson, Mr. Heineman, and the Dorean Group.
On September 22, 2005, Mr. Johnson and Mr. Heineman were indicted by a grand jury. On November 14, 2007, following a four-week trial, a jury returned guilty verdicts on one count of conspiracy to commit mail fraud in violation of 18 U.S.C. § 1349, and thirty-four separate counts of mail fraud in violation of 18 U.S.C. § 1341.
A Dorean Group “broker” charged with participating in the conspiracy was also sentenced along with Mr. Heineman and Mr. Johnson. In August 2007, William Julian, 44, of Cayce, South Carolina, pleaded guilty to conspiracy to commit mail fraud, wire fraud, and bank fraud in violation of 18 U.S.C. § 1349. On March 18, 2008, Mr. Julian was sentenced to 5 years imprisonment.
A hearing for final determination of restitution is scheduled for June 10, 2008.
Assistant United States Attorney C. David Hall and Special Assistant United States Attorney Brigid S. Martin are the attorneys prosecuting this case with the assistance of paralegals Christine Tian and Sabah Khan. The convictions and sentences are the result of a three-year investigation by FBI Special Agents Kathia Harp, Spiro Stamos, Emmanuel Pascua, Matthew Ernst, and Holly Erickson.
Further Information:
Case #: 05-00611 WHA
A copy of this press release may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/cgi-bin/login.pl.
Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney’s Office should be directed to Joshua Eaton at (415) 436-6958 or by email at Josh.Eaton@usdoj.gov.
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