An Alpine businessman, already facing federal charges in an alleged $100 million Ponzi scheme, is now facing a new indictment with 19 additional counts accusing him of entirely new crimes.
Claud "Rick" Koerber, 36, was hit with a three-count indictment in May of this year charging him with mail fraud, wire fraud and tax evasion. Prosecutors handed down a new indictment this week that includes a total of 22 counts and additional charges of fraud in the offer and sale of securities, sale of unregistered securities, money laundering, and additional counts of both wire fraud and tax evasion.
All of the charges stem from an investment scheme that was allegedly operated by Koerber from 2004 through 2008. Prosecutors believe he solicited investors and then encouraged them to "act and think like a bank." The groups of investors were supposed to recruit other investors, all under Koerber's assurance that their investments were "backed, collateralized or secured by real property," the indictment states.
Koerber was involved with several businesses in Utah, including Founders Capital, Franklin Squires Investments and Franklin Squires Companies. The indictment states that Koerber operated a Ponzi scheme to make it appear as though these companies were turning a profit to secure more investors when, in fact, "at no time during the operation of the scheme did the Founders Capital or Franklin Squires … turn a profit."
The indictment states that Koerber was still able to secure over $100 million in investment funds, $50 million of which was used to make "Ponzi payments." Koerber also allegedly spent $850,000 on restaurants, $800,000 on a restaurant venture, $1 million on "expensive automobiles" and $5 million on various money-making ventures.
According to the indictment, the money laundering charges stem from the purchase of a 2001 Ferrari 550 Barchetta, costing $218,896, and a 2004 Ferrari 360 for $213,460. It alleges that these vehicles allowed Koerber to perpetuate the scheme by allowing him to "create a false aura of success," which he also did by showing pictures of his mansion home, a large cabin in Heber that he called his "second home" but didn't actually own, and minting his own gold coins.
Two of the six counts of fraud in the offer of sales and securities arose from advertisements Koerber allegedly distributed in magazines telling investors they could "safely earn 1 percent to 5 percent per month on your cash."
Koerber has vehemently denied that he has been involved in any wrongdoing, even holding a press conference in late May to proclaim his innocence. His attorney, Marcus Mumford, was just added to the case in late October and knew at the time he was appointed that prosecutors had planned on filing an indictment with additional charges. However, he said he had to find out about it by way of a press release, though he said he had just talked to prosecutors.
When contacted by the Deseret News, Mumford said he didn't believe the multiple new counts were based on new information.
"Judging from the press release, the government seems to be stretching the same allegations over more and more charges," he said. "These are the same allegations that the government first asserted in the course of an investigation which an independent government auditor said was inappropriately conducted."
Mumford said a state auditor found that the conduct of the Utah Department of Securities in the investigation of Koerber was "inappropriate" and "inconsistent" because the department failed to "follow established policies and procedures." Mumford said the woman who headed up that investigation is now leading the government's case, so his office plans to discover what the specific issues were within the investigation.
Regardless, Mumford said his client is optimistic.
"Mr. Koerber remains upbeat and is taking these new developments in stride," Mumford said. "We are as eager to defend Mr. Koerber against these new charges as we were the old ones."
Koerber faces a maximum penalty of 20 years in prison if convicted of mail fraud. The fraud in the offer and sale of securities counts carry potential maximum sentences of five years per count, as does the sale of unregistered securities. The 10 wire fraud counts each carry a potential sentence of 20 years. The two money-laundering transaction counts carry a potential 10-year sentence, and the tax evasion counts, from 2005 and 2006, carry potential penalties of up to five years. Each count in the indictment also includes a potential fine of $250,000.