Ninth Circuit Courts of Appeals affirms convictions in huge Meridian DBSI fraud case

Posted at 3:42 PM, Aug 15, 2017
and last updated 2017-08-15 17:42:52-04

A three-judge panel of the Ninth Circuit Court of Appeals Tuesday unanimously affirmed all of the criminal convictions of Douglas Swenson, Mark Ellison, David Swenson, and Jeremy Swenson, former executives of Diversified Business Services and Investments, Inc. (also known as DBSI) of Meridian. 

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 Ellison, David Swenson, and Jeremy Swenson. 

After a forty-five-day trial before Chief Judge B. Lynn Winmill in 2014, a jury convicted the four of all forty-four counts of securities fraud, and defendant Douglas Swenson of an additional thirty-four counts of wire fraud. 

The jury found the defendants had operated DBSI as a fraud on its securities investors, and that its CEO and founder, Douglas Swenson, had affirmatively lied to or misled investors. 

In the summer of 2014, the district court sentenced Douglas Swenson to twenty years in prison and to pay $180,632,025 in restitution; Mark Ellison to five years in prison and to pay $32,158,501; David Swenson to three years in prison and to pay $32,158,501; and Jeremy Swenson to three years 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 Douglas 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 a calculation error on the restitution amount, the Ninth Circuit vacated the district court’s $32,158,501 order of restitution as to Mark Ellison, David Swenson, and Jeremy 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 a rehearing or rehearing of the decision before the Ninth Circuit Court of Appeals, and may petition for a what’s called a writ of certiorari before the United States Supreme Court.