Ninth Circuit Affirms All Convictions in DBSI Case

BOISE - By Memorandum Disposition today, a three-judge panel of the Ninth Circuit Court of Appeals unanimously affirmed all of the criminal convictions of Douglas L. Swenson, Mark A. Ellison, David D. Swenson, and Jeremy S. Swenson, former executives of Diversified Business Services and Investments, Inc. (“DBSI”) of Meridian, Idaho. The Ninth Circuit explained that it was affirming all four men’s “convictions and sentences in virtually all respects,” but was vacating and remanding the $32,158,501 order of restitution for a $3,408,413 reduction as to defendants Mark A. Ellison, David D. Swenson, and Jeremy S. Swenson.

After a forty-five-day trial before Chief Judge B. Lynn Winmill in 2014, a jury convicted all four defendants of all forty-four counts of securities fraud, and defendant Douglas L. Swenson of an additional thirty-four counts of wire fraud. The jury found that the defendants had operated DBSI as a fraud on its securities investors, and that its CEO and founder, defendant Douglas L. Swenson, had affirmatively lied to or misled investors.

In the summer of 2014, the district court sentenced defendant Douglas L. Swenson to 240 months in prison and to pay $180,632,025 in restitution; defendant Mark A. Ellison to 60 months in prison and to pay $32,158,501; defendant David D. Swenson to 36 months in prison and to pay $32,158,501; and defendant Jeremy S. Swenson to 36 months in prison and to pay $32,158,501. Each of the defendants appealed their convictions to the Ninth Circuit Court of Appeals. Douglas Swenson, David Swenson, and Jeremy Swenson also appealed their sentences. The Ninth Circuit permitted the defendants to remain released from prison pending the resolution of their appeals.

In affirming all of the convictions against all of the defendants, the Ninth Circuit stated that “there was a plethora of evidence from which a rational juror could have found that each Appellant was guilty of the crimes for which he was convicted.” In affirming defendant Douglas L. Swenson’s 240-month sentence, the Ninth Circuit stated that the sentence was “substantively reasonable,” citing the district court’s thorough consideration of the “seriousness of the offenses, Douglas’s personal characteristics, his role in the offenses, and the staggering losses to the victims.”

After the government conceded calculation error on the restitution amount, the Ninth Circuit vacated the district court’s $32,158,501 order of restitution as to defendants Mark A. Ellison, David D. Swenson, and Jeremy S. Swenson. The Ninth Circuit remanded the matter to the district court with instructions that the restitution amount be reduced by $3,408,413.

The defendants may seek panel rehearing or rehearing en banc of the three-judge panel’s decision before the Ninth Circuit Court of Appeals, and may petition for a writ of certiorari before the United States Supreme Court.