Real Testimonies of FFETF Victims
“There are those [in power] who turn Justice into bitterness”
–Amos of Tekoa
Name not used.
“In 2011, the Fed raided my office casting a very broad net with their warrant. The main thrust of their warrant was going after insurance fraud and healthcare fraud. Upon not finding anything to charge me or my partners with, they handed everything over to the IRS. After nearly four years of waiting we were finally charged with filing false tax returns. Following a Frank’s Hearing, the Judge in our case threw out all the evidence because the Feds lied and left out relevant information which the magistrate would have not signed the warrant. The Feds appealed to the 10th circuit and after 13 months over turned the lower court’s ruling. I was out of money and beyond exhausted, so I entered a plea deal. I received a felony and 8 months in prison, over owing the IRS less than $20,000 in back taxes over four years. My good name has been destroyed, my business destroyed, and my family really destroyed.”
“‘Pete’ referred his friends and family to an investment program. After a couple of years, the group running the investment program left the country with the money. Pete, being an honorable man, went to the government as a whistle blower to notify them of what happened, and, began working on ways to restore the investors. Working tirelessly the next three years, Pete had restored $11 million back to the investors of the $17 million lost, and was within a year of having the investors fully restored. But … then the DOJ / FFE Task Force came knocking. Despite the fact that not one of the investors wanted him to go to prison, and despite the fact that he had no knowledge of the fraud, and despite the fact that Pete was likely within a year of having all the investors made whole, Pete was sentenced to 10 years in prison, and his wife to 5 years, and restitution of $4.5 million (a life sentence for a “felon”). Now, thanks to the DOJ, the investors will likely never see the balance of the money.”
Name not used.
“It all began when I sued the DOJ to recover assets of mine that they took while at another company. This began an avalanche of attacks from the DOJ. My family has been harassed and attacked by the DOJ for over a decade. My business was raided in 2012. It is impossible to describe in one paragraph the depth and breath of their relentless attacks. As a small business owner, husband, and father of six children, I did everything I could do to peacefully resolve any of the DOJ issues. When that did not work and I had exhausted all avenues, I was left with no choice but to defend myself going to trial. In 2015, at trial, even the judge recognized their vindictive pursuit by throwing out the majority of charges against me. But still I lost at trial on the remaining charges. However we argued that the trial was not fair. The judge agreed and offered us a new trial on one of the charges. But there was a new problem, the DOJ had essentially destroyed me financially. I had no money for another trial. So I was sentenced to 48 months. The DOJ was malicious and vindictive in their pursuit. I learned first hand the unchecked and retaliatory power of the DOJ. As a consequence, I am now serving time in prison as a federal felon.”
“Chad D. was the CEO and Founder of a real estate company that would purchase, rehab, market and sell various types of properties throughout the U.S. His company was involved in the purchase, sale, and transfer of title of over 1,000 properties. In 2015 the SEC stepped in regarding the structure of the promissory notes. He reached a civil settlement, and changed the structure of the notes. All parties were pleased with the settlement and he continued the normal activities of the business. Then the bomb. Less than a year later, the DOJ came knocking. Chad was accused of selling unregistered securities. The DOJ seized 53 properties owned by the company. When Chad said no to a plea deal by the DOJ, they threatened to indict Chad’s wife. But his wife had NO connection to the business in any way, so how could they threaten her? The DOJ called her a “relief defendant”, meaning simply because she benefited financially as Chad’s wife, they would indict and go after her. He could not let that happened. So Chad pled guilty and got seven years on prison and saddled with $16.5 million in restitution without giving a single dollar of credit for the 53 properties that were taken. The real fraud was the DOJ taking the properties and not giving him any credit. It’s called theft. With no assets or money, and Chad in prison, this left his wife and four young children destitute with nothing for themselves. To this day the DOJ has not given an accounting of the 53 properties nor credited the sale of them towards Chad’s restitution. The DOJ created the victims by seizing collateral that secured their loans, and not allowing any access to it.. It was the DOJ who committed fraud and theft of the properties. It was the government that created the victims.”
“In 2007 and 2008 David was part of a company that worked to develop 26 acres in an 800+ acre master planned community. After putting over $8 million dollars into the project in development and construction costs, the main lender was taken over by the FDIC. The entire project was shut down as the economy fell into a deep recession. It was then that the DOJ came knocking. Despite the fact that David followed Fannie Mae Rules, the FDIC investigator lied to the grand jury. Dave was charged with fraud. To protect his wife, he pled guilty to fabricated false charges and had his life ruined forever with a sentence of 60 months and $6.2 million of restitution (a life sentence).
“I started an income tax preparation service in 2001, located in Montgomery, AL. Eventually the company grew to have over 13 offices. In one of the offices, four employees were preparing false tax returns and splitting the money with another young lady that was outside of the company. I found out about this in 2008 and fired the young ladies.
I hired a lawyer that took sworn statement from the young ladies. They admitted to committing the fraud and confessed that no one in management knew what they were doing. I went to the IRS of offer repayment of the money they had stole. We were told they would get back with us. Little did I know that the FFE Task Force was in full swing. And, unbeknownst to me, the IRS agents went to the young ladies and offered them a deal: either say that Jeremy taught them how to commit fraud or face 10 years in prison (in addition to having their children taken). In 2011 the Department of Justice indicted me for 1 count of Conspiracy to Defraud the U.S. Government and 26 counts of Aiding and Abetting the Filing of a False Tax Return.
The DOJ asked if I would take a polygraph test. I agreed. I PASSED the test showing I was completely unaware of what the young ladies had done and that I was INNOCENT of the charges I was accused of. Then in a meeting of approximately 20 people, the DOJ Assistant US Attorney explained that he was not interested in the truth, he was only interested in putting me in jail. At the trial, many of the DOJ’s star witnesses testified that I was not in a conspiracy with them and that as soon as I found out what they were doing, I fired them. One witness for the DOJ was even investigated for committing perjury during my trial.
I was sentenced to over 13 years in prison. I was a single father, the long sentence destroyed my family. I have been in prison over 7 years now.
“We raised approximately $7 million in funds from Japanese investors to construct and operate a large precious metal processing plant on a 640 acre claim we controlled. In 2014 the plant was completed and production of precious metals was successfully initiated. In 2015, the foreign investors came to inspect the plant and confirm operation. They took hundreds of photos and two hours of video confirm to confirm operation. Unfortunately this success was interrupted by the Bureau of Land Management demanding that the entire plant was to be moved several hundred yards due to ‘water issues’. It’s important to note that at this point over half of investor funds had been returned to the investors, and we were about 3-6 months from paying off the balance plus making a significant profit. But the Feds were determined on destruction and shut it down immediately, essentially guaranteeing investor losses! Additionally we controlled other claims valued at over $12 million of unprocessed precious metal ore. Regardless of all of this the FBI came with a decease and desist, completely destroying and possibility that the investors would receive the remaining $3.5 million. The Fed’s called it ‘Fraud’! It was not! At no time was there EVER the remotest possibility of fraud. The project had only one Goal! To make ALL involved a lot of money. Only the Feds stopped that from happening.”
Matt was a trusted policy adviser to the United States Senate and House of Representatives; and a professional fiduciary to numerous pension plans. Under his direction, two of Matt’s pension plans invested in something called, “Save America(tm),” a health care solution rolled out around the same time as ObamaCare. Save America was a superior alternative to ObamaCare. Its existence was an existential threat to ObamaCare, and therefore a threat to Obama’s legacy. Suddenly, and coincidentally with the failure of the ObamaCare website, Special Agent Morse, working under the auspice of the Financial Fraud Task Force was assigned to investigate Matt. But Morse never directly obtained or examined any of Matt’s work files, computer hard drives, or transaction records from him. She never even asked the court for a warrant to do so. She never interviewed him. No one from the government did. Instead, Agent Morse spun an elaborate tale using a handful of disaffected former consultants severed for cause, to tie SaveAmerica to a completely unrelated failed ski resort, and used all this to convene a grand jury. This led to a rubber stamped indictment. The trial was fit for Saturday Night Live. Matt’s appellate attorney was threatened by the DOJ. Only recently, six years after losing the trial, did the State of Idaho Board of Attorneys sanction the public defender for violating the Bar’s Code of Ethics in his case. Meanwhile he has spent six years in prison. Six years away from his wife and children. Six years suffering as an innocent man at the hands of a group of narcissistic prosecutors and corrupt court appointed lawyer. And he still has nine years to go! (The Canary in the coal mine: In a subsequent and similar case, Special Agent Morse, after being caught by the judge in unscrupulous behavior during the trial, sadly committed suicide.)
“Cameron L. operated the National School Fitness Foundation, a non-profit organization operating in 21 states solving the obesity problem in children in public schools. The program reduced levels of obesity through a scientifically backed fitness regimen developed in cooperation with the Cooper Clinic out of Dallas Texas. Minnesota State Attorney General Mike Hatch (D) investigated school districts in his state for possible violations of the public bidding process. The Foundation always kept on file all proper bidding of each school purchase for is own record to ensure compliance. AG Hatch was being prodded by Attorney General Eric Holder’s mission to end “Enron Corruption” which laid the foundation for the Financial Fraud Enforcement Task Force (FFETF) and systematically targeted the National School Fitness Foundation for investigation. There had never been a complaint filed against the Foundation by anyone to bring about an investigation of wrong doing. Only later was it revealed that the investigation had two purposes. 1- To bring about criminal charges regardless of wrongdoing, and, 2- To increase AG Hatch’s political capital as he would be running for governor in the coming years (a political race he lost by a very narrow margin). Out of the 5 board members, 5 executives, 7 advisory board members, and 3 law firms that had continually represented the Foundation, only a select four were charged including Cameron L. (CEO) along with an unaffiliated government witness, Mont Beardall. Lewis was offered a plea deal of 6 months to 2 years prison for cooperating. Lewis felt he was innocent and decided to go to trial. In 2007, he was convicted. Cameron L., father of 3 and community servant was sentenced to 17 years prison and $40 million restitution (a life sentence for someone tagged with a felony). Government witness Mont Beardall testified on behalf of the DOJ and received probation.
“I initiated a discrimination lawsuit against a bank in Colorado. After which, the bank called in the State who in turn prosecuted me for writing bad checks. I lost the state case due to the bank investigator (who just happened to be handling the discrimination suit also) creating fake statements trying to show that my account had insufficient funds. Only recently, after years of trying to prove the truth, were we able to acquire the actual bank statements. As a result, the appeals court has now remanded this back to the court to correct the injustice done to me. But it gets worse. The State, who knew they had a weak case, decided to call the IRS! Enter the DOJ investigation in 2010. Over a 4-6 year investigation, and out of 8,500 tax clients, the IRS was able to persuade (scare, intimidate, etc) five clients to testify against me. I repeat, only five out of 8,500. And “coincidentally”, all five clients were in the process of either getting their U.S. Citizenship, or recently received their citizenship. All five were threatened with losing their citizenship if they did not cooperate with the DOJ. I fought for two years and eight months more. Then we went to trial. One of the five witnesses, who spoke English well, showed up with an interpreter, and suddenly the others had a hard time understanding English … it’s amazing what the DOJ can accomplish with a threat. I was found guilty and sentenced to 10 years. Five of those years 10 years were added as a result of being a prior felon from the earlier State charges which are now in the process of being OVERTURNED! And all of this unnecessary destruction took place during the FEE Task Force. They destroyed my business, family, and life.
“Bruce and his family were deeply involved in serving the community, working with inner city kids, children with disabilities, taking in the homeless, helping those with addictions, and families in crisis. Bruce had a company that lent money to mid-size companies. One such recipient company, with 3,000 employees was world known. Even a former VP of the United States served as legal counsel to the company and was on it’s Board. Previously, the VP was the State Attorney General, trained to recognize crime, if something were wrong certainly he would have seen it. In addition, a former prosecutor of 10 years, served as Director of International Business Development. He was also trained to recognize crime. Both highly endorsed the company! But unknown to all except a small inside group, there was both a real and ponzi business running side by side. Bruce knew nothing of the fraud, and the DOJ admitted as much. In fact, it was Bruce’s pressure for an audit that exposed the matter! Wanting to do the right thing, Bruce put his company in bankruptcy and did a civil settlement with the bankruptcy court, giving up a lifetime of assets. He would have to start over.
Then, over a year later, the DOJ / FFE Task Force came knocking. Any hope of a meaningful defense collapsed when the national 250 attorney law firm he hired and paid a fixed fee to, also collapsed, making the national media. The choice was now between “shitty or shittier”. The DOJ was not interested in Bruce’s efforts to do what was right, or Bruce’s pressure for an audit that exposed the whole thing. Even Bruce’s attorney, from the collapsed law firm no longer went with Bruce to meet with the AUSA, because Bruce was out of money. Bruce was on his own. There was no way to fight the overwhelming power of the DOJ and politicians involved. A plea deal was the only option to their threats of 20 years or more in prison. Little did he know he would be handed a life sentence anyway. Not just the seven years in prison for what could have been a civil matter, but also a staggering $58 million restitution judgment from the DOJ. The kind of judgment that could not be paid in 58 life times. Bruce may have made mistakes, but the DOJ prosecuted him because it could, not because he intended to defraud anyone.
Securities Fraud Conviction of Douglas Swenson, Jeremy Swenson, David Swenson, and Mark Ellison
DBSI, a national industry-leading real estate syndication firm, was undisputedly an extremely successful company for 29 years employing more than 300 people and providing investments to over 7,100 individuals. Evidence at trial established that prior to the financial crisis that occurred following the September 15, 2008 failure of Lehman Brothers, no investor in DBSI had ever lost money or failed to receive a payment on their property. In the wake of the 2008 financial crisis, Douglas Swenson, DBSI CEO, wanted the opportunity to restructure the company but was not given it because he opposed invading DBSI subsidiaries, the note companies, for the cash to pay the bankruptcy examiner and other attorneys.
Prior to the indictments, the SEC (Securities and Exchange Commission) had completed a multi-year investigation of DBSI, had cleared DBSI of any wrongdoing and allowed it to continue business as usual. The SEC evaluated all the conduct that the prosecution later said was illegal. FTI Consulting, the financial group appointed by the DBSI Creditors’ Committee to investigate DBSI, reported that they found nothing wrong at DBSI and described DBSI’s records as complete, accurate, and thorough.
The Bankruptcy Examiner, who was tasked with investigating inter-company transfers and transactions between and among DBSI, made a number of false assertions about the books, records, and flow of funds at DBSI and had to be immediately corrected by DBSI’s Creditors’ Committee and its financial consultants (FTI Consulting).
The government prosecutors argued incorrectly that DBSI was a Ponzi scheme (a business with investors but no assets). DBSI always delivered the real estate it sold to investors, and always used the money raised in note offerings exactly as promised. It was undisputed that every single TIC investor received a deed for his ownership interest in the investment property.
Because DBSI was a privately traded company offering securities only to accredited investors, prior to investing in DBSI’s sponsored offerings, each investor had to certify that he had read the investment materials and could withstand losing their entire investment. Each investor’s financial advisor (their securities broker-dealer) had to certify that his due diligence showed that the investment was suitable for his client. Under private securities’ rules, DBSI did not have to provide investors with any financial information. The only requirement was that any information disclosed be truthful. The testimony of witnesses confirmed that it was.
The prosecution’s investigation was incomplete, sloppy, dishonest and deceptive. The federal prosecutors refused to consider that DBSI was not the perpetrator of securities fraud but was instead the victims of securities fraud. The prosecution relied on speculative inferences of fraud from ordinary business practices in securities transactions and invalid chains of logic to seek convictions. The government’s evidence was insufficient to sustain the verdicts and the trial was riddled with procedural errors. These errors fundamentally undermined Defendants’ right to a fair trial. The government offered no evidence that Defendants engaged in any “scheme to defraud” or any “act, practice, or course of business that would operate as a fraud” under the securities fraud statute. One of the jurors following the trial came forth saying they regretted voting for conviction at all.