BOISE, Idaho (AP) — Two officials at a failed southwest Idaho property management company have been released from prison while they appeal their fraud convictions.
Authorities on Monday released Jeremy Swenson, 42, and David Swenson, 37, from the Sea-Tac Federal Detention Center outside Seattle.
The Idaho Statesman reports (http://bit.ly/1thKFr6) in a story on Tuesday that Judges Sandra Ikuta and Johnnie Rawlinson of the 9th Circuit Court of Appeals ruled the two weren't a flight risk, didn't pose a danger to the community, and raised a "substantial question" of law in their appeals.
In April, a jury convicted DBSI company President Douglas Swenson of 44 counts of security fraud and 34 counts of wire fraud; secretaries Jeremy Swenson and David Swenson, sons of Douglas Swenson, of 44 counts each of security fraud; and company attorney Mark Ellison of 44 counts of security fraud.
Jeremy Swenson and David Swenson were sentenced to three years each.
Douglas Swenson received 20 years and Ellison five. Those two also appealed and were released while they seek to have their convictions overturned.
Jeremy Swenson and David Swenson based their requests for release on a previous 9th Circuit ruling allowing Douglas Swenson and Ellison out of prison during the appeals process.
The company, DBSI, once managed 280 shopping centers, office and other commercial buildings in 34 states. It filed for bankruptcy in 2008. More than $102 billion in claims were filed in bankruptcy court.
At the sentencing hearing in U.S. District Court in Boise in August, Judge B. Lynn Winmill said he didn't believe the defendants set out to defraud their clients, but he concluded that they concealed the company's financial problems and continued to accept new investments when they knew the firm was failing.
Groups of investors would buy a property and lease it back to DBSI in exchange for guaranteed annual returns of up to 9.5 percent, paid monthly. The investments appealed to people who were looking to avoid capital-gains taxes after selling other investments.
Prosecutors said DBSI's investments were almost entirely unprofitable and dependent on new investor funds to continue operations.
Information from: Idaho Statesman, http://www.idahostatesman.com