Former DBSI chief operating officer released from prison

An executive of a failed Boise real estate investment company completed his commitment Sunday at a facility in Salt Lake City.

Gary Bringhurst, 48, pleaded guilty last year to one count of conspiracy to commit securities fraud. He was allowed to serve 30 days consecutively followed by another 30 days over 15 weekends in a row.

He was the only of the five DBSI executives arrested who cooperated with federal prosecutors. He spent more than 28 hours on the witness stand testifying over seven days at the trial of the other DBSI defendants. Chief U.S. District Judge B. Lynn Winmill said at sentencing in December that he had not seen such cooperation before.

Prosecutors said the information Bringhurst provided was vital to securing the convictions of former DBSI President Douglas Swenson, General Counsel Mark Ellison and corporate secretaries Jeremy Swenson and David Swenson, who are Douglas Swenson’s sons.

DBSI managed office buildings, shopping centers and warehouses for investors nationwide until it collapsed into bankruptcy in 2008. Prosecutors said the company was a Ponzi scheme, with money from new investors used to pay earlier investors.

Douglas Swenson, 66, was sentenced last summer to 20 years after conviction on 44 counts of securities fraud and 34 counts of wire fraud. Ellison was sentenced to five years after conviction on the 44 counts of securities fraud. Jeremy Swenson, 42, and David Swenson, 37, were sentenced to three years each on conviction on 44 counts each of securities fraud.

The Swenson brothers reported to a federal prison outside Seattle in September to serve their sentences but were released in late December. A 9th Circuit Court of Appeals panel ruled that the brothers, who have appealed their convictions, did not pose a flight risk and were not a danger to the community, and that their appeals raised a “substantial question” of law.

The Swensons and Ellison contend the company was the victim of the Great Recession. They denied doing anything illegal.

Bringhurst pleaded guilty months before the other defendants went on trial. He also agreed to pay $300,000 in restitution to the trustee of the separate DBSI bankruptcy case.


Two judgments totaling $264.6 million have been made against Douglas Swenson in the bankruptcy case.

Meanwhile, a confidential settlement was reached between the bankruptcy trustee and Thomas Var Reeve, a former DBSI minority owner. Bankruptcy trustee James Zazzali had said Var Reeve obtained $7 million in illicit payments from DBSI entities.

More than 22,000 claims totaling $102 billion have been filed with the bankruptcy court. DBSI's 8,500 investors and vendors who did work for the company will be lucky to recover pennies on the dollar.