DBSI Principals Plead Not Guilty to Securities Fraud, Wire Fraud, Mail Fraud, Bank Fraud, and Conspiracy

BOISE—Mark A. Ellison, 64, of Boise, Idaho; David D. Swenson, 35, of Boise, Idaho; and Jeremy Snow Swenson, 40, of Meridian, Idaho, appeared today in United States District Court and entered pleas of not guilty on a superseding indictment charging them with conspiracy to commit securities fraud, wire fraud, mail fraud, and interstate transportation of stolen property stemming from their involvement in the DBSI Group of Companies (DBSI), U.S. Attorney for the District of Idaho Wendy J. Olson announced. The case was set for a jury trial to commence on June 24, 2013, before Chief United States District Judge B. Lynn Winmill.

Mark Ellison founded DBSI along with Douglas Swenson, who is also charged and previously pled not guilty to the indictment. Ellison served as DBSI’s general counsel during the period charged in the indictment. David D. Swenson and Jeremy Snow Swenson were assistant secretaries for DBSI. Founded in 1979 and headquartered in Meridian, Idaho, DBSI was essentially a conglomerate of real estate and non-real estate companies, including DBSI Housing and DBSI Securities.

According to the superseding indictment, from January 2007 through November 2008, the defendants publicly represented that DBSI was a profitable company and had a net worth in excess of $105 million. The indictment further alleges that the defendants knew and believed that, contrary to the disclosures made to investors and their own DBSI employees involved with the marketing and selling of DBSI investments, DBSI’s real estate and non-real estate business activities were universally unprofitable; DBSI’s much-touted master lease investment product was losing approximately $3 million dollars a month; and DBSI was relying on new investor funds, including investor money that DBSI represented would only be used in particular circumstances, to continue operations and pay returns to other DBSI investors. The indictment alleges that the conspiracy continued until DBSI filed for bankruptcy in November 2008. The 89-count superseding indictment also charges all the defendants with 44 counts of securities fraud, 34 counts of wire fraud, six counts of interstate transportation of stolen property taken by fraud, and two counts of bank fraud. The defendants are also charged with conspiracy to commit money laundering.

Based on the conspiracy and fraud charges, the superseding indictment seeks forfeiture of properties and assets totaling $169 million.

The conspiracy to commit securities fraud, wire fraud, mail fraud, and interstate transportation of stolen property charge is punishable by up to five years in prison, a maximum fine of $250,000, and up to three years of supervised release. The conspiracy to commit money laundering charge is punishable by up to 20 years in prison, a maximum fine of $250,000, and up to five years of supervised release. The securities fraud charges are each punishable by up to five years in prison, a maximum fine of $250,000, and up to three years of supervised release. The wire fraud charges are each punishable by up to 20 years in prison, a maximum fine of $250,000, and up to five years of supervised release. The bank fraud charges are each punishable by up to 30 years in prison, a maximum fine of $1 million, and up to five years of supervised release. The interstate transportation of stolen property charges are each punishable by up to 10 years in prison, a maximum fine of $250,000, and up to one year of supervised release. The false statement charge is punishable by up to two years in prison, a maximum fine of $250,000, and up to one year of supervised release.

The case was investigated by the Federal Bureau of Investigation and Internal Revenue Service-Criminal Investigation. The case is being prosecuted by Assistants United States Attorney George Breitsameter and Anthony Hall, and Department of Justice Tax Division Trial Attorney Mark Williams.