Men sentenced for debt scheme

March 20, 2008 10:31:52 AM PDT
Two Bay Area men were sentenced Tuesday for orchestrating a debt elimination scheme that victimized homeowners and lenders throughout 35 states, the U.S. Department of Justice announced today.

Kurt F. Johnson, 45, of Sunnyvale, was sentenced to 25 years imprisonment, and Dale Scott Heineman, 48, of Union City, was sentenced to 21 years and eight months imprisonment. A jury returned guilty verdicts in November for the men on 34 separate counts of mail fraud and one count of conspiracy to commit mail fraud.

Operating as the Dorean Group in Union City and Newark, Johnson and Heineman bilked as many as 3,500 homeowners and at least 20 lenders in a mortgage elimination scheme using fraudulent documents in their clients' titles to make it appear as if the loans had been repaid.

Hundreds of thousands of dollars were fraudulently obtained by clients of the Dorean Group in new home equity loans by presenting false "free and clear" titles to lenders. The Dorean Group received 50 to 75 percent of the funds from clients who received new loans.

William Julian, 44, of Cayce, S.C., was also sentenced Tuesday to five years imprisonment for his involvement as a "broker" to the Dorean Group. He pleaded guilty in August to conspiracy to commit mail fraud, wire fraud, and bank fraud.