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Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of Smith Dollar, PC, is licensed to practice law in California and maintains offices in Santa Rosa, California. Email Ms. Dollar
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Judge Orders Procedure for Relief from Dorean Group Tranfers (and Case Update)
Judge William Alsup signed an order on June 21, 2006 providing a procedure whereby homeowners that deeded their property to the Dorean Group as trustees may apply for modifications to the injunction to allow them to cure title defects cause by the Dorean Group debt elimination scheme.
The order provides that homeowners seeking to modify the injunction must file a Request to Modify the Preliminary Injunction for Property Address. The request must state the reasons for the modification and describe the proposed transaction. It must be served on Dale Heineman, Kurt Johnson, lenders with secured interests in the property and counsel for the government in the criminal case. After a time period for opposition, the magistrate shall make a ruling which may be subject to de novo review. Please review the Order Setting Procedure for Requests to Modify Injunction for Borrowers to Seek Return of Property Interests Conveyed to Defendants Heineman & Johnson for specific information on the procedure.
On our last update of the status of the criminal proceedings, Dale Scott Heineiman and Kurt Johnson had been ordered to undergo psychiatric examinations. In the Order Requiring Mental Examinations, the Court stated that Heineman and Johnson, who had refused counsel, had made multiple statements ‘that give reason to believe they may suffer from a mental disease or defect that renders them mentally incompetent to the extent that they are unable to understand the nature and consequences of the proceedings against them, to properly conduct their own defense or to assist potential counsel in their defense (or that the record might suggest incompetence to an appellate court.) The court referred to statements suggesting Heineman and Johnson ‘believe that they were in communication with Jesus and that he had told them he was burning down three judges’ homes.’ The court noted that in issuing that order, it was not implying or finding that Heineman and Johnson were mentally incompetent.
Although the psychiatric examinations were sealed by the court, Heineman and Johnson were not found incompetent and the case is proceeding. The court held a Faretta Hearing to ensure that the defendants were, in waiving their right to be represented by counsel, making a knowing and intelligent decision that represented an exercise of informed free will. Heineman and Johnson are each acting as their own attorneys and the court denied the government’s request to appoint ‘stand-by counsel’ for the defendants.
The court recently issued an “Order re Capitalization of Defendant’s Names.” Apparently, Heineman and Johnson requested that the court free them and dismiss charges because they spell their names “Dale Scott Heineman” and “Kurt F. Johnson” and the indictment files against them sometimes spells their name with only uppercase letters (i.e. “DALE SCOTT HEINEMAN” and “KURT F. JOHNSON") In the alternative, they requested an evidentiary hearing ‘on their identities’ or requiring that the indictment be amended to change the capitalization.
The court wasn’t overly impressed by the argument and found that the disagreement over capitalization didn’t provide a basis for the requested relief and denied the request. The court also rejected the defendants’ arguments that the capitalized spellings denote to “Cestui Que Trusts” and that they are therefore being held for the alleged crimes of the Cestui Que Trusts in violation of the Due Process Clause and the Sixth Amendment.
The court noted that the argument is a ‘creative endeavor based on a formalistic but fanciful distinction’ and that the ‘emptiness of this argument must be clear by now.’ The court went on to state:
“It is time that defendants turned their considerable intelligence toward viable defense strategies.”
Some of the documents that have been filed by the defendants include:
Constructive notice and demand for abatement; demand for court of record; request for stay of proceedings; affidavit of truth by “William Franklin Julian”, Sui Juris, points and authorities
CONSTRUCTIVE NOTICE of notice of refusal for cause without dishonor the order for psychiatric examination under U.S.C. 18:4241 and order taking case off e-filing by Dale Scott Heineman
MOTION for summary judgment or in the alternative a settlement by set-off or by acceptance of unconditional tender of defendants affidavit in support order by Dale Scott Heineman
NOTICE by Dale Scott Heineman, Kurt F. Johnson of acceptance of oath of office
NOTICE of corrections of caption of superceding indictment to refelct the removal of the ens legis for the placement of the natural man by stipulation of the parties by Dale Scott Heineman, Kurt F. Johnson
DEMAND for surrender of bond verified blaim and notice and dishonor contract by Dale Scott Heineman, Kurt F. Johnson
Failed Mortgage Firm Trustee Allowed $50,000 in Fees Union Leader
U.S. Bankruptcy Court Judge J. Michael Deasy will approve $50,000 in legal fees for the trustee of failed mortgage brokerage businesses Financial Resources Mortgage Inc. and CL&M Inc.
Bend Oregon Event to Help Homeowners Prevent Foreclosures Oregon.Gov
As part of an ongoing effort to help homeowners avoid foreclosure, state agencies are organizing a foreclosure-prevention event in Bend on Saturday, March 27, 2010.
Shelbyville Man Gets 2-Year Sentence For Loan Fraud Chattanoogan.Com
Prosecutor Gary Humble said the lost was approximately $2.3 million in the mortgage fraud involving hundreds of homes in the Shelbyville area.
Lend America, VP Ashley Banned from FHA Housing Wire
Michael Ashley, the embattled former vice president of Federal Housing Administration (FHA)-backed mortgage originator Lend America, and the company he worked for, were permanently banned from doing business in the industry last week.
Countrywide Tries to Pin Blame on Insurer Court House News
Countrywide Home Loans demands $111 million from Triad Guaranty Insurance, claiming Triad is trying to blame mortgage lenders for the insurer's role in the housing bubble and collapse.
Investors Say They Were Swindled in Property Scheme Fox 13 Now
Utah Division of Consumer Protection is joining forces with a few investors who claim they have been cheated by an agency called "Utah Mini Ranches.
Greenfield Man Accused of Housing Scam The Republic
A former real estate agent conned at least eight people by renting them properties actually owned by a federal agency and then running off with their deposits, prosecutors said.
Appraisal Institute Opposes Obama Administration's Plan for Homeowner 'Short Sales' PR News Wire
Citing concerns about increased mortgage fraud, four organizations representing more than 35,000 real estate appraisers today voiced their opposition to changes to an Obama administration program that will encourage "short sales" of homes.
Ownership Rights to Get Another Look TBO.Com
State lawmakers may beef up protections of property owners' rights by rewriting a law this spring that is at the center of a case of alleged fraud in Pasco County.
Thursday, February 18, 2010 F. Jeffrey Miller Trial Continued Testimony
As reported by Anne Mitchell, who viewed the trial:
Angela Parenza worked for Jeff Miller as the office manager for 7 or 8 years beginning in 1998. Parenza was indicted along with Miller and pled guilty to conspiracy to commit bank fraud and money laundering. Parenza testified that Miller or his contractors allegedly preferred to build all the...
Wednesday, February 10, 2010 F. Jeffrey Miller Trial Coverage Continued - Witness Testimony
Steve Middleton Testimony - Coverage Provided by Anne Mitchell
The Government continued in its cross examination of Steve Middleton. He was shown several HUD-1 statements involving sales of homes located in Overland Park, KS, and Olathe, KS. The HUD statements each allegedly showed line items of payments to (James) Moser & Associates, LLC's...
Monday, February 01, 2010 F. Jeffrey Miller Trial Coverage - Continued Witness Examination
According to Anne Mitchell, who is present in court for the trial:
Next Witness: Kelly Sanford
Kelly Sanford of the Federal Reserve was a short witness for the Government. Sanford manages electronic payments between banks and member financial institutions. He was shown copies of wire transfers and asked whether they coincided with the counts in...
Wednesday, January 27, 2010 F. Jeffrey Miller Trial - Prosecution Witnesses Continued
According to Anne Mitchell, who is viewing the trial:
January 13, 2010
Witness: Rick Hayes
Rick Hayes testified that on the day that he closed on his Miller Enterprise home, he received a phone call from the Kansas Banking Commission informing him that his loan was fraudulent. After the Hayes responded to a classified ad, they met with John...
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The information and notices contained on Mortgage Fraud Blog are intended to summarize recent developments in mortgage fraud cases and mortgage banking matters nationwide. The posts on this site are presented as general research and information and are expressly not intended, and should not be regarded, as legal advice. Much of the information on this site concerns allegations made in civil lawsuits and in criminal indictments. All persons are presumed innocent until convicted of a crime. Readers who have particular questions about mortgage banking, mortgage fraud matters or who believe they require legal counsel should seek the advice of an attorney. The creators, editors and sponsors of Mortgage Fraud Blog do not intend to create a confidential relationship or an attorney-client relationship by communication via or arising from this site.
Rachel Dollar, the editor of Mortgage Fraud Blog, is an attorney and Certified Mortgage Banker who handles litigation for lending institutions and secondary market investors. She is an author and a nationally recognized speaker on the topic of mortgage fraud. Ms. Dollar is a shareholder with the law firm of 
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