Closing arguments wrapped up Friday in the trial for former real estate guru Rick Koerber, who is accused of illegal business dealings and running a Ponzi scheme.
After hearing about evidence for weeks in Salt Lake City’s federal courthouse — including seven days of testimony from Koerber himself — jurors deliberated for about three hours Friday night and will continue deliberations Monday.
Koerber faces 17 charges in an indictment that alleges that, from 2004 to 2008, he took in about $100 million from investors and used about half as interest payments, paying it back to investors to give the appearance of profitability.
When the enterprise stopped making payments in 2007, investors were owed about $47 million, according to a January indictment. Those investors lost life savings, retirement funds and equity in their homes that they had taken out as loans and poured into Koerber’s businesses.
Prosecutors have said their case is about Koerber’s alleged operation of a Ponzi scheme, that he used the money for different purposes than what he told investors he would and that he used investor money for personal purposes but didn’t pay taxes on those funds.
“What is this case about? This case is about fraud,” prosecutor Stewart Walz told jurors Friday. “… What is fraud? It’s deception, creating an image of success. [That] the money that you’re soliciting is going one place to be spent in one area when it’s not — it’s being spent in another area.”
In the defense’s closing argument, attorney Marcus Mumford accused federal prosecutors of deception themselves, saying the state presented only “snippets” of Koerber’s business dealings and purposely limited the evidence given to jurors.
“When we first got started, I told you what was going to happen,” Mumford told jurors. “I told you they’re building a case of half-truths. … Who is deceiving whom?”
Mumford told jurors that his client is innocent of the accusations first lodged by prosecutors eight years ago, and he asked them to find Koerber not guilty of all charges.
“Mr. Koerber has been falsely accused, ladies and gentlemen,” he said. “For years, we’ve been waiting for this day.”
Koerber echoed that sentiment outside the courthouse hours later. “The facts are the same today as they were 10 years ago,” Koerber told reporters. “The charges are false. I take responsibility for everything my business did.”
In hindsight, Koerber said, he would “do some things differently,” but he emphasized that he‘s proud of the business he built and believes that “in the end things are going to work out.”
Prosecutors accuse Koerber of taking money from new investors to pay interest to previous investors to make the enterprise seem profitable. Koerber admitted on the witness stand that at times he did do that — but he said the money was backed completely by equity in real estate and asserted that that meant he was using the equity to pay interest.
In the early 2000s, Koerber had touted himself as a guru of real estate investing who offered classes to teach his “Equity Milling” strategy. That led him to head a real estate investment operation using that strategy, running, in part, on loans from investors.
He still owes people money, he said Friday night, and looks forward to “getting back to work” when this case is behind him. Koerber feels “confident” in the judicial process.
The Utah County entrepreneur was originally indicted on charges eight years ago. But Mumford challenged how federal agents and prosecutors had investigated his client and their evidence. A federal judge tossed out significant pieces of evidence in 2011 and 2013. By 2014, the judge had tossed the case altogether due to speedy trial issues.
But prosecutors appealed part of the dismissal to the 10th Circuit Court of Appeals, which sent the case back to Utah for reconsideration. That process led to the January indictment.
If convicted of any of the charges — which include allegations of securities fraud, wire fraud, money laundering and attempted tax evasion — Koerber faces a possible sentence in federal prison.
— Reporter Mariah Noble contributed to this story.