The head of an Idaho real estate investment operation who took funds from up to 800 Minnesotans was found guilty Monday of wire and securities fraud by a federal jury in Boise.
Douglas Swenson, the head of DBSI Inc., was convicted on 34 counts of wire fraud and 44 counts of securities fraud in a trial that lasted 42 days.
Also convicted with Swenson on securities fraud charges were business associate Mark Ellison and sons David Swenson and Jeremy Swenson. No sentencing date has been set.
Douglas Swenson and his partners ran a company that invested in commercial real estate, including buildings in the Twin Cities, that sold interests in the properties through an instrument called tenant-in-common units. DBSI marketed the properties as safe investments that produced steady returns.
However, federal prosecutors showed, the company was unprofitable and lacked the financial net worth that it claimed to investors.
When the real estate market collapsed in 2008, investors lost at least $169 million. Approximately 500 to 800 Minnesotans were among the 8,000 who lost sums ranging from $25,000 to $1 million.