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Judge makes accused fraudster Koerber choose between attorneys

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Scott Sommerdorf | The Salt Lake Tribune Real estate investment promoter Rick Koerber walks to a court in Salt Lake City in February.

Facing jury selection in nine days, former real estate investment promoter Rick Koerber was given a choice by a federal judge — keep his publicly paid attorney or go with his former attorney who had gotten previous fraud charges tossed out of court.

Koerber, at a hastily convened hearing Friday, chose his former attorney Marcus Mumford to represent him at a trial slated to begin Aug. 21 on 18 charges of securities and wire fraud, money laundering, and tax evasion. Koerber has pleaded not guilty.

U.S. Magistrate Judge Paul Warner told Koerber that he had to choose between Rebecca Skordas as his court-appointed attorney or going with Mumford, who is representing Koerber without charge and who signed onto the defense team just last week.

Warner said Koerber couldn’t have an appointed attorney while retaining Mumford, even though Mumford said he’s not being paid by Koerber for his services.

The hearing came a day after Warner and U.S. District Judge Robert Shelby, who will preside over the trial, turned down Mumford’s motions to recuse themselves from the case because of possible bias or conflicts or interest. They said the motions came too late in the process and lacked substance.

Mumford had gotten a previous case against Koerber tossed out by U.S. District Judge Clark Waddoups, but it was revived in a new grand jury indictment after a 10th Circuit Court decision sent part of Waddoups’ decision back for reconsideration.

Warner said he called the hearing Friday to make Koerber choose who would represent him at the impending trial. He also said Mumford couldn’t be appointed by the court and paid with public funds because he was not on the list of attorneys who fulfill such assignments when defendants can’t afford to pay their own attorneys.

When Mumford asked why that choice needed to be made, Warner said, “I think your client is entitled to counsel. He’s entitled to his counsel of choice, or he’s entitled to you as appointed counsel. He’s not entitled to both.”

Mumford continued to spar with the judge and at one point asked why Warner had told Skordas she was not to hire Mumford to assist in Koerber’s defense. That question had Skordas shaking her head as if to deny it.

“I’m not sure what you mean by that,” Warner said, noting, “Ms. Skordas is shaking her head.”

After a break in the hearing during which Koerber consulted both attorneys, he returned to tell Warner that he had chosen Mumford to represent him.

From 2004 to 2008, Koerber ran a series of entities grouped around his companies called Franklin Squires Cos. and Founders Capital, through which he taught a real estate investment strategy called “equity milling.” The companies took in about $100 million in investments by telling potential investors they could earn 2 percent to 5 percent returns per month.

The dismissed indictment and the current one allege that Koerber’s enterprise was not making money and that he had used about $50 million to repay other investors to make the operation appear profitable. He is also alleged to have used some to pay for personal expenses, such as purchasing luxury cars.

The operation collapsed in 2008 as real estate sales and prices plummeted at the beginning of the Great Recession, and with investors owed about $48 million, according to court documents.