- Associated Press - Friday, September 5, 2014

BOISE, Idaho (AP) - Four officials at a failed southwest Idaho property management company have filed appeals after being convicted of fraud for bilking investors out of billions of dollars.

The company, DBSI, once managed 280 shopping centers, office and other commercial buildings in 34 states. It filed for bankruptcy in 2008. More than $102 billion in claims were filed in bankruptcy court.

The appeals were filed under seal earlier this week in the 9th U.S. Circuit Court of Appeals involve the April convictions of DBSI company President Douglas Swenson of 44 counts of security fraud and 34 counts of wire fraud; secretaries Jeremy Swenson and David Swenson, sons of Douglas Swenson, of 44 counts each of security fraud; and company attorney Mark Ellison of 44 counts of security fraud, the Idaho Statesman reported (https://bit.ly/YhAoT4).

U.S. District Court Judge B. Lynn Winmill last month sentenced Douglas Swenson to 20 years in prison. Ellison received a five-year sentence, and Jeremy Swenson and David Swenson were sentenced to three years each.

The Court of Appeals is giving the defendants until early January to submit their briefs in the case, with federal prosecutors to provide their answering briefs in early January. David Swenson filed a separate motion asking that he be allowed to remain free while his appeal is pending.

Winmill has allowed the men to remain free until the federal Bureau of Prisons determined where the men would serve their sentences. David Swensen said he received a letter from the federal probation and pretrial services offices to surrender to the Federal Detention Center in SeaTac on Sept. 19.

At the sentencing hearing, Winmill said he didn’t believe the defendants set out to defraud their clients but did conclude they concealed the company’s financial problems and continued to accept new investments when they knew the firm was failing.

Groups of investors would buy a property and lease it back to DBSI in exchange for guaranteed annual returns of up to 9.5 percent, paid monthly. The investments appealed to people who were looking to avoid capital-gains taxes after selling other investments.

Prosecutors said DBSI’s investments were almost entirely unprofitable and dependent on new investor funds to continue operations.


Information from: Idaho Statesman, https://www.idahostatesman.com

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