Question #1: NEW - What effect will the criminal convictions of Douglas Swenson, Jeremy Swenson, David Swenson and Mark Ellison have on the Liquidating Trusts?

On April 14, 2014, a jury in Boise, Idaho found former DBSI President Douglas Swenson guilty of 44 counts of securities and 34 counts of wire fraud. David Swenson, Jeremy Swenson and Mark Ellison were found guilty of 44 counts of securities fraud. The defendants were acquitted of the remaining charges.

Doug Swenson was sentenced to 20 years.  David and Jeremy Swenson were sentenced to 3 years each.  Mark Ellison was sentenced to 5 years.   The defendants are pursuing appeals and have not yet reported to prison.

The criminal prosecution was brought by the United States federal government. Neither the Liquidating Trustee nor the Litigation Trustee was responsible for the criminal prosecution. The liquidation of the Liquidating Trusts’ assets for distribution to beneficiaries is a separate and distinct process from the criminal prosecution.

The Litigation Trustees have pursued civil damages claims against the defendants and other parties. This litigation resulted in judgments, the settlement of certain claims, and the recovery of certain funds that had been seized by the United States government.  If there are sufficient funds recovered (net of costs/expenses) , they will be disbursed directly to beneficiaries from the Estate Litigation Trust.

The fraud convictions may have tax implications for investors. However, each person’s tax situation is different, so please contact your tax advisor to determine if and/or how this information may apply to your particular circumstances.