Final DBSI Executive Sentenced
BOISE—Gary Wayne Bringhurst, 47, of Highland, Utah, was sentenced today to five years of probation, a condition of which is 60 days of intermittent imprisonment, for conspiracy to commit securities fraud, U.S. Attorney Wendy J. Olson announced. Bringhurst is the former Chief Operating Officer of DBSI Housing, Inc. Chief United States District Judge B. Lynn Winmill also ordered Bringhurst to pay restitution in an amount to be determined. Bringhurst pleaded guilty on April 8, 2013.
According to the plea agreement, in 2007 and 2008, he conspired with Douglas Swenson, Mark Ellison, David Swenson, and Jeremy Swenson to mislead DBSI investors by: (i) converting for DBSI’s use Accountable Reserve funds belonging to investors in contravention of representations that they would be used for tenant improvements, leasing improvements, and capital improvements to the investors’ properties; (ii) misrepresenting DBSI Housing, Inc.’s financial strength by “netting” millions of dollars of uncollectible accounts receivables from technology company affiliates against accounts payable that were actually paid; (iii) failing to disclose to investors that the DBSI Master Lease portfolio of properties was losing millions of dollars and was not sustainable, in contravention of representations that the Master Lease portfolio was profitable; (iv) failing to disclose that DBSI was reliant on new investor funds to make Master Lease payments and to sustain its overall operations.
Bringhurst is the final DBSI defendant to be sentenced. Previously, in August of 2014, Douglas Swenson, CEO and President of DBSI, was sentenced to 240 months in prison; Mark Ellison, General Counsel of DBSI was sentenced to 60 months in prison; David Swenson, Assistant Secretary of DBSI, was sentenced to 36 months in prison; Jeremy Swenson, Assistant Secretary of DBSI, was sentenced to 36 months in prison. All four men were convicted on April 14, 2014, after trial before a federal jury, of 44 counts of securities fraud. Douglas Swenson was convicted of an additional 34 counts of wire fraud. Their cases are pending appeal.
This case was investigated by IRS Criminal Investigation and the Federal Bureau of Investigation.