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United States v. Swenson is a federal securities fraud case involving Douglas L. Swenson, the founder of DBSI (Diversified Business Services and Investments, Inc.), and several of his co-defendants. In 2014, Swenson was convicted of 44 counts of securities fraud and 34 counts of wire fraud in connection with a multi-million dollar investment scheme based in Idaho. The case is one of Idaho’s largest white-collar crime prosecutions, resulting in over $100 million in investor losses.

DBSI (Diversified Business Services and Investments, Inc.) was a Meridian, Idaho-headquartered private real estate investment firm. It was founded in the late 1970s by Douglas Swenson. DBSI marketed itself as a sponsor of tax-advantaged real estate investing. Its primary product was Tenant-in-Common (TIC) investments, where multiple investors could collectively own commercial properties such as office buildings, hospitals, and shopping malls and defer capital gains taxes under IRS Section 1031 exchanges.

During the 1990s and early 2000s, DBSI expanded exponentially, maintaining a portfolio of over 200 properties across the United States and attracting more than 8,000 investors. Many of its customers were retirees who wanted consistent monthly cash flow and long-term asset appreciation. DBSI sales promotions and marketing emphasized stability and security, appealing to the firm as a conservative investment vehicle that would withstand economic recession.

However, as the national real estate market began to decline in the mid-2000s, cracks in DBSI’s financial structure emerged. The company allegedly began misrepresenting its solvency and overall cash position, concealing the fact that it was increasingly reliant on new investor capital to fulfill obligations to earlier participants. Prosecutors later alleged that this created a business model similar to a Ponzi scheme, wherein funds from new clients were employed to pay interest or dividends to existing investors, despite the fact that there were no viable underlying profits.

In November 2008, DBSI entered into bankruptcy protection with more than $600 million in liabilities. Its collapse triggered a wave of civil suits, investor complaints, and eventually a federal investigation. Thousands of investors lost significant amounts of money, with some losing their entire retirement savings. The collapse of DBSI came to be one of the largest financial frauds in the history of Idaho, gaining national media attention as well as regulatory and law enforcement agency interest.

In 2014, the Department of Justice (DOJ) filed charges against Douglas Swenson, his sons David and Jeremy Swenson, and DBSI counsel Mark Ellison. The defendants were charged with securities fraud and wire fraud for their roles in misleading investors and misusing funds. After a high-profile jury trial in the United States District Court for the District of Idaho, all four defendants were found guilty. Douglas Swenson received a 20-year prison sentence and was ordered to pay over $180 million in restitution. His co-defendants received lighter sentences.

Following the conviction, the government pursued restitution by attempting to garnish bank accounts, including one containing the Social Security benefits of Swenson’s wife, Ellen Swenson. This led to a legal dispute over whether those funds could be seized under the Mandatory Victims Restitution Act (MVRA).

In 2020, the Ninth Circuit Court of Appeals ruled in United States v. Swenson, No. 18-30215, that the government could not garnish Mrs. Swenson’s Social Security benefits. The court held that although the MVRA allows broad recovery of a defendant’s property, it does not override the protections granted to a spouse’s Social Security benefits under the Social Security Act.

The decision included a partial concurrence and partial dissent by Judge N. Randy Smith. While the majority ruled in favor of Mrs. Swenson, Judge Smith argued that under community property laws in Idaho, assets earned during marriage—including Social Security deposits—could be considered jointly owned and thus subject to garnishment. He emphasized a broader interpretation of the MVRA’s language and its goal to provide full restitution to victims.

United States v. Swenson is significant both for its scale and its legal implications. The original fraud case remains one of the largest corporate frauds in Idaho history, with over $100 million in investor losses. The Ninth Circuit’s decision on garnishment further clarified the limits of restitution enforcement under federal law, particularly regarding the intersection between the MVRA and Social Security protections.

The ruling has since been cited in legal discussions concerning asset exemptions and property rights under restitution laws. It also highlighted ongoing tensions between protecting innocent spouses and enforcing victim compensation.

• Securities fraud
• Ponzi scheme
• Restitution (law)
• List of United States corporate fraud cases
• Ninth Circuit

In 2020, the Ninth Circuit Court of Appeals ruled in United States v. Swenson, No. 18-30215, that the government could not garnish Mrs. Swenson’s Social Security benefits. The court held that although the MVRA allows broad recovery of a defendant’s property, it does not override the protections granted to a spouse’s Social Security benefits under the Social Security Act.

United States Court of Appeals for the Ninth Circuit. (2020, August 19). United States v. Swenson, No. 18-30215. https://scholar.google.com/scholar_case?case=10836621192888510236

This case is the official appellate court opinion following Douglas Swenson’s conviction for securities and wire fraud in connection with the DBSI investment scheme. It focuses on the government’s attempt to garnish his wife’s Social Security benefits to satisfy a $180 million restitution order. I will use this as my primary source to cite the formal court ruling, factual background, legal reasoning, and post-conviction consequences.

Kirkpatrick, R. (2008, November 24). DBSI rode real estate’s rise—and fall. Idaho Business Review. https://idahobusinessreview.com/2008/11/24/dbsi-rode-real-estates-rise-and-fall/

This article provides background on how DBSI attracted investors and structured its real estate offerings. It explains the business model that led to its eventual collapse, helping to contextualize the fraud. I will use this to describe how the scheme operated and to provide historical and financial insight into why the case was significant.

Popkey, D. (2014, July 11). DBSI executives sentenced in massive Idaho investment fraud case. Idaho Statesman. https://www.idahostatesman.com/news/business/article214395554.html

This source reports on the sentencing of Swenson and his co-defendants, along with the broader impact the fraud had on Idaho residents. It adds a local, human-centered perspective to the case. I will use it to support claims about public reaction, investor harm, and the notability of the case.