Drowing in Debt? Eliminate It! – Founders of Nationwide Debt Elimination Scheme – Dorean Group – Sentenced to Federal Prison! White Collar Crime Speaker Chuck Gallagher Says “There’s No Such Thing As a Free Ride”

The target – people drowning in debt, their nose barely above water, needing help. The solution (so they thought) was the Dorean Group. The outcome – a big fat scam. There is no such thing as a free ride.

Kurt F. Johnson, age 45, and Dale Scott Heineman, age 48, were sentenced last week for their roles in creating this national debt elimination scheme. Johnson will spend 25 years in federal prison (that’s 55% of his life thus far) – exiting prison after his 65th birthday. Heineman was sentenced to 21 years – likewise, exiting after his 65th birthday.


Can you imagine being in the prime of your life and finding yourself facing, what could be the most productive years of your life, in federal prison? Sad.

According to the US Attorney’s news release:

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.

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. Mr. Julian was sentenced to 5 years imprisonment.

Information related to the scheme was reported on scamfraudalert.com in 2005. An excerpt is shown here:

Dorean Group, headquartered in suburban Oakland, California, uses independent agents to promote its program. One such representative, Capital Creation Resource, describes the program on its website (www.ccrsolution.com). After paying a $3,000 fee, the homeowner agrees to place the title to their home in a family trust, then present the lender a document that contains 40-50 “legal” challenges to the loan. Dubbed the “CPA Report”, this document outlines 40-50 claimed “violations” of federal laws committed by the lender. The lender must respond with proof of the validity of the loan. When the lender fails to respond, a power of attorney is filed which gives the trustees authority to act on behalf of the lender. Using the power of attorney, a “Discharge of Mortgage” is filed certifying that the loan has been fully paid.

The next step is to apply for refinancing on the home. Once obtained, the homeowner, their Dorean Group Agent and Dorean Group divide the funds. This new loan is then “eliminated” using the same technique.

The BBB’s investigation led it to the Cuyahoga County Recorder’s office where evidence was found of several properties involved in this activity. All had a quitclaim deed filed giving ownership of the home to the trust. Two Dorean officials appear as trustees on these quitclaims, D. Scott Heineman and Kurt F. Johnson. These same individuals appear on power of attorney and discharge of mortgage paperwork.

Obviously the Better Business Bureau was on to something in early January of 2005 as both were indicted by a grand jury on September 22, 2005.

VICTIM OR NOT? It has been reported that as many as 3500 homeowners have been victimized. What may be controversial is whether these folks were “victims”? I have no doubt that they have suffered losses and extreme trouble as a result of Johnson and Heineman’s scam. But, are they victims? That question tends to evoke emotion. But in order to be a victim there need to be several parts that come together at essentially the same time: (1) No knowledge; (2) no personal gain; and (3) direct suffering as a result.

I submit that the 3500 homeowners did not know they were being scammed – true – but were seeking a way out of debt that clearly was legally manipulative in hopes that they could get more money and eliminate debt. The “victims” had a vested interest in the process and outcome – and had it worked, would have been unjustly enriched. The fact that it didn’t doesn’t mean they were “victims.” What is does mean is they were gullible, duped and at the core was the desire to gain something for nothing.

Now let me be clear – you don’t have to commit the crime in order to have played a part in the overall drama. And, if, in any way, you played a part, then you can’t be a VICTIM. If you played a role in a scheme to get legitimate debt eliminated, you are not victimized as the motivation was to victimize the debt holder. While I know that statement will be unpopular, it is nonetheless right.

As a speaker on white collar crime and business ethics, I often say: “Every choice has a consequence!” Again, with substantial prison sentences issued once again the fact that you reap what you sow has come true. Remember, only positive choices can yield positive results.

Feel free to comment – especially if you were duped by this group. Your comments may help others!

22 Responses to Drowing in Debt? Eliminate It! – Founders of Nationwide Debt Elimination Scheme – Dorean Group – Sentenced to Federal Prison! White Collar Crime Speaker Chuck Gallagher Says “There’s No Such Thing As a Free Ride”

  1. Andrew M says:

    I am writing to report the current activities of one Joyce Earl Delancy Lambeth a.k.a J.E.D Lambeth who i just found out was prohibited from engaging in deceptive commercial practices offering fraudulent mortgage elimination services to residents of North Carolina in 2005 together with members of the Dorean Group

    This said individual has now spread his tentacles to defrauding victims from out of state of which my wife is now tragically a victim of through an anti-establishment group called Sovereigns Without Subjects (www.sovereignswithoutsubjects.com)in conjunction with one Bob Plimpton(www.bobplimpton.com) who sold mortgage elimination kits to my wife for over $500 . Falsely using bible scriptures to coarse their victims, my wife was drawn into all this in her bid to win custody of her kids from her ex-husband. She was taken advantage of due to her desperation to have her kids and her vulnerability at the time. In the process of pretending to help my wife get her kids back she was also sucked into participating in their fraudulent mortgage elimination schemes as well as other law breaking endeavors, in exchange of strings of fees they termed donations, that has my wife now sitting in jail convicted for the felonous crime of custodial intefference and has also lost her home in a trustee sale after this said individual convinced(brainwashed her) into stop paying her mortgage bills and also provided her with strings of fraudulent documents that got her convicted for custodial intefference and also documents that adviced her not to attend court that also has her facing charges for bailing jumping, also a felony in Montana. This is a woman who has not once in her lifetime been in trouble with the law; not even a traffic ticket.

    I am trying to expose the criminally fraudulent activities of this said individual and his group in order to hopefully somehow put a stop to their life destroying schemes. My wife has now lost not just time and money she dedicated into the activities of this said individual and his group but also her career(as a Montessory teacher), her house(which was sold for a fraction of what it was actually worth because this said individual and his group convinced her not to communicate with the bank and mortgage companies), her children(she has not been allowed to see them since these said individual and his group filed frivolous documents that made here keep them beyond the stipulated time with the false impression that they’re now permanently hers), her freedom (as she is now sitting in jail awaiting sentecing for custodial interferrence) as well as her reputation (as a well known and respected Montessori teacher in Livingston, Montana as she now is a convicted felon charged with a second felonious crime of bail jumping; all from the advice of these people).

    I hope somehow this people can be stopped before they destroy more homes and lives like they have just done to mine

  2. joshua blue says:

    i am a Victim ,Kenny& Effie Reiswig, William J(Bill) Kennedy,Peter Kim,and several others showed us documents and letters showing how a debt elimination was 100% legal and effective they had Lyle Davies(now decesed) pose as the director of the Oakland CA, I.R.S. office telling people that it was legal. they made their story believable and they preyed on people that were in financial trouble and needed a ray of hope ,they belonged to a local church and they searched out their prey they came to us we didn’t look for them they were good at what they did they made over 10 million dollars and they are running free while the people that trusted a friend of 30 years or more lost everything yes we are victims no matter what you say they have destroyed many lives just because you trust a close friend that promises he can help you with your financial situation dosen’t mean you know they are scamming you would you give up all of your savings and equity if you had 1 doubt this was a scam? we wouldn’t have

  3. Tony Bolivar says:

    I am not a victim of the Dorean Group, but was a personal friend of Mr. Heineman. I remember being impressed by the presentation but couldn’t accept the basic premise of mortgage elimination. It sounded “too good to be true”. Please pray for Dale Scott and his family during this crisis.

    • Jill Heineman says:

      Hey, Tony. Funny we came across the same blog. glad you didn’t get caught up in the mess! Thankl you for your prayers.

  4. Byron says:

    Obviously the Federal Court considered many of the Dorean clients victims, however, I agree with the author, the dorean clients logically CAN’T be victims for the reasons he gave. There’s no evidence in the court records that the banks were the victims. Now it’s obvious that the Federal Court that put Kurt & Scott away now have some serious jurisdictional problems they need to face. YOu can’t put someone away in jail for 25 years on lies.

    Course in order to convict Kurt & Scott, there must be victims of the alleged mail fraud. Without any victims, there can’t be any scam. Without a scam, the convictions of Kurt & Scott are unjust. The truth is there were no dorean client victims & the convictions of Kurt & Scott was a complete sham. The Dorean Group just presented the truth & proved their claims by their paper trail. They were just whistleblowers against the lending industry, hardly something to convict them of mail fraud. Course than again, the appeal by Kurt proved THAT THEIR WAS NO MAIL FRAUD ON THEIR PART EITHER. The appellate court rejected their appeal, more proof that the courts & government are a part of the problem by protecting the fraud of the banks. Do you think the government is committed fraud by giving a bail out to the lenders & not to you, Joe consumer? Hey it’s your money isn’t it & your government?

    What has happened to the world economy since the press has uncovered the fraud of the lending industry, whether it’s “COOKING THE BOOKS” or deceptive practices, greed, giving loans without proper controls & standards, or giving predatory loans or violating the TILA laws? More evidence that the Dorean Group were ahead of their time!!!!

    Remember all the alleged bank fraud charges were dropped before the trial started. This is proof that the lenders lost nothing from the Dorean Group’s activities so they weren’t victimized at all. The clients weren’t victimized by the Dorean Group, although they were certain victimized by their lenders bad behaviour of foreclosures, etc. and their lies & their fraud & deceptions to their clients that they lent them money. Remember your lender sold the promissory note in order to come up with the funds to lend you & did this all behind your back? Was that material fact disclosed to you, that you were the source of your own funds by your signature on the promissory note? Did your lender produce the original promissory note he sold (which he no longer had) when he foreclosed on your home? Course not, because most Judges are protecting the creditor, the lenders. That’s their purpose. They aren’t there to protect you, Joe consumer.

    The real blame needs to be put on the proper parties. If the banks lent no money at all & created the loan out of thin air without risking their own assets, than the bank fraud & the mail & wire fraud started with the lender/banks & Kurt & Scott only proved that through their bank challenges for all their clients. If you don’t OWE THE MONEY, THAN WHY PAY IT IN ALL FAIRNESS? If the lender can’t prove he RISKED HIS OWN ASSETS & loaned the monies, & you challenge it, and the challenge goes unanswered, than the debt needs to be expunged.
    Even the FDCPA gives a borrower the right to challenge a debt. The Dorean Group takes on these rights to challenge as the clients trustees & goes to jail. Where’s the justice there? “You can’t pray a lie” & that’s what this bias article seems to be doing, by putting the blame on the wrong parties.

    Course the perpetrators have already presented their guilt: Even the guilty admit their wrong. Can it be any plainer?

    “Federal Reserve bank credit does not consist of funds that the Reserve authorities get somewhere IN ORDER TO LEND, but constitute funds that they are empowered TO CREATE.” (Federal Reserve Bank: Its Purposes and Functions, 1939 Edition) Evidence straight from the Federal Reserve’s own documents !!

  5. Hugo Vargas says:

    Being a victim may have to comply with certain definitions. Some definitions are moral, or pure logic, common sense and sure the use use of a lot of legaleese (this cryptic legal terms that we barely can read, much less understand) .
    The fact is that when many of the victims (as per my definition and experience), were troubled, desperate or simply convinced by some one, then it was too late and there was no one to help and provide solid information; someone that would explain what a mortgage is.
    Ignorance is the mother of all our problems.
    I entered into the scam.
    I had no interest into doing money. I had a property (acquired thanks to another scam), that was burning more money than I could earn.
    Out of desperation I just saw a way to get rid of the property (not my residence).
    I was really lucky, because I came out of this ordeal.
    But I spent more than 70K selling the property and over 40K in lawyers to fix the title.
    Do I feel stupid doing business?
    I’m a victim?
    Thanks to the Lord, the judge thinks so.
    Can I help others to avoid this shameful thing happening again? I wish I can do something useful.

    Knowledge (if we can not afford education) is the only help we can provide.

    Yes, every decision will have consequences.
    But it is impossible to skip signing papers without understanding them. If you understand the concepts of a mortgage you’re a select minority.
    But anybody buying a house will sign those cryptic papers. Same thing when you sign a rental car agreement (or is it a contract?).
    Have you tried to read the terms and conditions you sign when you install software?
    Or when you buy a gun? Or when you get a credit card? (Beware of these!)
    I don’t agree to the simplistic definition of “victim”. It is not as simple as it sounds.
    Let’s start by understanding what we sign and why.
    Let’s start by being more Christians (compassionate if you’re not Christian), but try to help this young couple sinking in debt when they don’t need to.
    Saving a few ones will help a lot.

    God bless America,

    Hugo Vargas

  6. I worked for a mortgage company during the time of the Dorean investigation. Our company received documents similar to the CPA doc. Thos documents are crazy filled with gibberish! I do believe that Heineman and Johnsons clients are victims, victims of their own greed and ignorance. Johnson and Heineman are the victimizers because they capitalized on their greed and ignorance with their web of deception,

    Interestingly, Johnson still maintains his innocence on a blog called Mortgage Fraud of all things. I follow the comments and his followers are grtowing a tad impatient of his religous rantings and promises.

  7. MinnItMan says:

    The ability to see red as blue, especially when a lot of money (even federal reserve notes) rides on it, is boundless.

    Interesting how these guys seem largely to work through churches – a good reason to stay away.

  8. jeremy says:

    I am a “victim” of the Dorean Morgage Elimination Program. I believed that what they were doing was legal and moral and wouldn’t have joined if I thought otherwise. I sent a check for $3,000.00 and I had a trust set up by Kurt and Scott and signed a service morgage agreement back in March of 2005. I believe Scott sent/filed a “Notice of Intent to Correct Title” to Countrywide Home Loans in April of 2005. Shortly after that I’m guessing that Kurt and Scott were arrested and couldn’t proceed with my case. I haven’t given this much thought since then and had resigned to the fact that I had been scammed and should have known better. I have always paid my mortgage on time as well as all my bills and I figured that this mistake was in the past. The other day I applied for a HELOC and during the title search they discovered that my home was in trust with Kurt Johnson and D Scott Heineman listed as the trustees. The bank says they need Kurt and Scott to sign off on the loan before they can finalize it. I like that my home is in a trust being a small business owner but I would like to dismiss Kurt and Scott as trustees and appoint others to take their place. Can I do this without getting Kurt and Scott to sign off in it? Or can I just go get a court order to change trustees since Kurt and Scott are in prison and can’t fullfill their duties as trustees? I need to do this fast.

  9. Ed says:

    Yes, I had to do this in 2007 as I had to sell my house out of state. I found an attorney that took them off as trustees and replaced them with myself. The Title company was satisfied and I sold the house

    • southerner says:

      How did you accomplish this? Having issues with this myself.

    • jerpaw says:

      I need to do this as well. I tried to get a HELOC a couple years ago and was denied because of the trust. I even have a notarized copy of a letter stating that Kurt and Scott resigned from their duties as trustees from my family trust, that Kurt’s dad helped me get from them in prison. For some reason the title company isn’t acknowledging this letter because it has a stamped signature. I was hoping the avoid having to hire a lawyer.

      Is there anyone out there who was able to clear their title from this mess without having to hire a lawyer?

      How much did it cost you to hire an attorney to do this for you?

  10. BlogZeal.com for home business…

    […]Drowing in Debt? Eliminate It! – Founders of Nationwide Debt Elimination Scheme – Dorean Group – Sentenced to Federal Prison! White Collar Crime Speaker Chuck Gallagher Says “There’s No Such Thing As a Free Ride…

  11. Me Me says:

    Bill Julian is out of prison and created a new company. Touting it as having a “sterling” reputation. Anyone interested in spreading the word on just how “sterling” he is?!!!


  12. Nancy Drewe says:

    IN 2004 THEY WERE NAMED AND THE CASE DID NOT COM EUP UNTIL 2008. http://mortgagefraudblog.com/perp-walk/item/11660-dorean_group_principals_are_sentenced jULY 7, 2010 APPEAL RULING HELD.
    Number 2004-01

    To: All MERS Members November 8, 2004

    Re: Family Trust Cases

    We have received information that Mortgage Electronic Registration Systems, Inc. (MERS)

    is being named as a defendant in a number of lawsuits involving two individuals as trustees

    of various family trusts.

    The Trustees, Kurt F. Johnson and Scott Heineman, have filed lawsuits primarily in

    California, but we have seen a few in Georgia and Washington that involve MERS.

    We are alerting our Members because we have reason to believe that documents have been forged

    by one or both of these individuals purporting to be officers of MERS and attempting to

    appoint themselves as an attorney-in-fact or agent of MERS. One or both of the trustees

    fraudulently sign a Substitution of Trustee appointing one of them as the new trustee of a

    deed of trust and then fraudulently sign a Notice of Rescission attempting to cancel a

    foreclosure legitimately filed by MERS.

    MERS Members should notify us if they are served with a lawsuit with the Plaintiffs being a

    family trust along with Scott Heineman, as Trustee and Kurt Johnson, as Trustee. We want

    to make it clear that in no way do either of these individuals have any affiliation with

    MERS; nor have either one of them ever been appointed as an officer of MERS or an agent

    of MERS. They have absolutely no authority to act on our behalf.

    The proper authorities are investigating this rash of lawsuits and MERS will be taking an

    active role in making sure that neither MERS nor our Members fall victim to meritless


    We will be notifying specific Members that we believe have registered mortgages on the

    MERS® System that may become the target for a lawsuit filed by a family trust. If you have

    any questions or comments, please contact the MERS Corporate Counsel, Sharon

    Horstkamp, at (703) 761-1270 or sharonh@mersinc.org.

  13. Nancy Drewe says:


    • Judge allslop says:

      Everyone still believe the mortgage challenge was a scam? No way the “banks” could be so utterly corrupt along with complicity of courts and Goverment regulators could they?

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