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Federal prosecutors intend to seize a Lake Oswego office building controlled by David Swanson, the disgraced wealth adviser who once pushed retirement advice on morning TV and whose license has now been revoked for years of defrauding elderly clients. Swanson purchased the $2.8 million building in 2019 with loans from clients and used the building as collateral for even more federal loans—all under false pretenses, prosecutors say.
The backstory: David Swanson is a licensed Lake Oswego financial adviser who spouted retirement advice on frequent morning TV segments on KATU-TV.
Judy Steele, 81, of West Linn was one of Swanson’s longtime clients, according to a lawsuit she later filed against him in Multnomah County Circuit Court. In September 2018, Steele’s husband of 48 years, Dugald, died from lung disease. Dugald, with Swanson’s advice, had been handling the couple’s finances, which included $1 million in annuities.
Shortly after Dugald Steele’s death, Swanson persuaded Judy Steele to sell the annuities, telling her it was a “one-time opportunity” and the sale would be tax free, according to her lawsuit. He took her checkbook and wrote out a $755,000 check to a holding company, which she then signed, in return for a promissory note.
Steele became suspicious of Swanson’s claims when she received a tax bill for the transaction, and confronted Swanson along with her son, Robert. Swanson became “red faced” and yelled, “If you cared about your mother, you would have been here!” according to the lawsuit.
Swanson later refunded the money to Steele, but not before pulling the same deception on another client, a retired elementary school teacher who’d first heard about Swanson from his TV spots. “This was a Ponzi scheme,” says Steele’s attorney, Greg Zeuthen.
Regulators launched an investigation. The Oregonian reported the allegations and accompanying investigation in 2021, revealing that Swanson had actually paid KATU for his morning TV segments, which the station called “monetized content,” and the relationship continued even while Swanson was under investigation. KATU has not responded to requests for comment.
Regulators found six other victims who’d paid Swanson a total of $1,575,000. The Oregon Division of Financial Regulation accused Swanson of using new clients’ investments to pay back other clients, revoked his license, and fined him $160,000.
The document: A declaration filed Feb. 7 in U.S. District Court by Rachel Royston, an investigator for the U.S. attorney for Oregon, reveals further details of the magnitude of Swanson’s swindle.
What it says: Royston’s declaration seeks to seize a two-story, 7,600-square-foot Lake Oswego medical office building Swanson purchased in November 2018. According to Royston, a certified fraud examiner, Swanson had not only lied to Steele—he also lied on a pair of Small Business Administration loan applications.
In those applications were emails in which Swanson claimed the funds for the purchase had been “earned over a decade of consulting for a private client,” rather than borrowed from Steele’s savings. Swanson claimed to have been paid by Steele to consult on a “real estate transaction involving five acres of raw land” and stated that he had “a number of similar ongoing projects and expects millions in the next 10 years,” according to Royston’s declaration.
He received the loans in late 2018, using the property at 4309 Oakridge Road as collateral. Royston concluded that the property was “obtained fraudulently” and subject to forfeiture under federal law.
Why it matters: Swanson’s license has been revoked, but he has not been charged with a crime. Kevin Sonoff, a spokesman for the U.S. Attorney’s Office, declined to comment on whether the declaration presaged a criminal case.
When asked for a comment, Swanson directed WW to his attorney. But he did talk to The Oregonian earlier this month. “I have accepted responsibility and given up my license,” he said, according to the newspaper. “I am currently in the middle of a serious personal health issue and will be focusing on that and my family going forward.”