A federal jury is expected to continue deliberations Thursday in the trial for former real estate guru Rick Koerber, who is accused of illegal business dealings and running a Ponzi scheme.
The jurors have deliberated for about 33 hours since Friday evening and have not reached a verdict. They deliberated for about three hours Friday evening, about 10 hours Monday, about eight hours Tuesday and nearly 12 hours Wednesday. The 12-member panel resumed discussing the case at 9 a.m. Wednesday and headed home about 9 p.m.
The deliberations follow weeks of evidence in Salt Lake City’s U.S. District Court — including seven days of testimony from Koerber himself.
A 17-count indictment accused Koerber of taking about $100 million from investors and using about half as interest payments, paying it back to investors to give the appearance of profitability, from 2004 to 2008.
When the enterprise stopped making payments in 2007, investors were owed about $47 million, according to the indictment, which was issued in January. 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.
Koerber used the money for personal purposes and did not pay taxes on it, according to prosecutors.
But defense attorney Marcus Mumford told jurors in his closing argument that his client is innocent. He accused federal prosecutors of deception, saying they presented only “snippets” of Koerber’s business dealings and purposely limited the evidence given to jurors.
Koerber admitted on the witness stand that he did at times take money from new investors to pay interest to previous investors to make the enterprise seem profitable. 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 touted himself as a guru of real estate investing and offered classes to teach his “Equity Milling” strategy. That led him to head a real estate investment operation that used that strategy and which ran, in part, on loans from investors.
He still owes people money, the Utah County entrepreneur told reporters Friday evening as the jury deliberated. He said he looks forward to “getting back to work” when this case is behind him. Koerber said he feels “confident” in the judicial process.
Koerber was originally indicted eight years ago, but Mumford challenged the evidence and how federal agents and prosecutors had investigated his client. A federal judge tossed out significant pieces of evidence in 2011 and 2013, and had tossed the case altogether by 2014, due to speedy trial issues.
Prosecutors appealed part of the dismissal to the 10th U.S. Circuit Court of Appeals, which sent the case back to Utah for reconsideration. That process led to the current indictment, which includes allegations of securities fraud, wire fraud, money laundering and attempted tax evasion.
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