DBSI Files For Bankruptcy
As reported here DBSI, a locally prominent real estate investment company is in serious financial trouble, having been named a defendant in civil lawsuits alleging fraud. Investors yesterday were dealt the next card in this hand - the BK card. DBSI has now filed for protection under the bankruptcy laws in hopes of keeping its fiscal head above water. The Idaho Statesman reports today that the filing is in response to ten lawsuits filed by investors who have lost money. Describing the company and its investment methods, the Statesman reported:
"Helped by the real estate boom, profits for DBSI and its investors grew effortlessly - and fast. The value of its assets grew from several million dollars in 2002 to $2.6 billion in 2008, said Paul Mangiantini, a Boise lawyer who represents investors.
But the mirage evaporated this year as the economy soured. This fall, the company began delaying payments to 12,000 investors around the globe, saying income from some rental properties is no longer enough to cover debt payments. It suspended all sales activity, closed sales offices around the country and laid off most of its staff."
Still, the final issue DBSI and its officers may have to face is the real possibility of criminal charges by either state or federal prosecutors. The mechanism used by DBSI to provide investors with the profits they wanted and DBSI had apparently promised, sounds a lot like a "security." If it sounds like a duck ... well you get the point. I said the last time that there are no guaranteed investments - and that is the case. Ask the folks who trusted giants like AIG, Fannie Mae and Freddie Mac. When good opportunities go bad and people lose money the tendency is to blame someone - and DBSI may find itself on the receiving end of that fickle finger. When the checks were coming in, DBSI and its officers were financial wizards and their investors happily received their money. But did DBSI engage in a "ponzi" scheme? Was their investment method real or imagined? Was it more or less than say - the Social Security "trust fund?" Only time will ultimately tell the story - but the battle lines are starting to be drawn, and the BK filing is just a defensive move. In the Army we dug in for a fight. Looks like DBSI is doing the same.
My brother is one of these investors. He has had 2 business of his own, has done quit well. That is until DBSI has taken everything away from him, his home and everything he owns. These criminels should not be able to hide under some law that enable them to hide offshore money or just their poor business practices.
We haven't heard that they have lost their homes or anything else. They should be in prison for a long, long time.
My brother is handicapped and unable to work, at least for a couple of years.
He thought DBSI was a great investment and tried to get me to invest. Thank God I didn't.
We can only hope and pray that the many investores like my brother will get their lives back.
I wish you the best of luck Mr. Mangiantini and your law firm. We have seen and heard about too many of these white collar crimes. These kind of people look good from the outside, but they have no heart.
Betty M. Hogle -one time Boise resident.