A trial date finally has been set for former Utah County real estate investing guru Rick Koerber, nearly five years after he was indicted by a federal grand jury on fraud charges that alleged he ran a giant Ponzi scheme that took in $100 million from investors.
But now hanging over the case is what role, if any, lead prosecutor Stewart Walz will play in the trial after U.S. District Judge Clark Waddoups ruled prosecutors had violated Koerber's rights and ethical guidelines when they authorized federal agents to contact and interview Koerber without consulting his attorneys.
Waddoups scheduled an eight-week trial to begin Feb. 10, about 3Â½ months shy of the fifth anniversary of the original indictment.
"We are very concerned about getting a date and moving forward," Assistant U.S. Attorney Barbara Bearnson told Waddoups at a hearing Tuesday.
Not present at the prosecution table was Walz, a veteran federal prosecutor who has been on the case since the beginning.
Waddoups earlier this month handed down a ruling in which he castigated prosecutors for allowing FBI and IRS agents to interview Koerber in 2009 without going through any of the attorneys who had represented him or his companies during the investigation into the business. The ruling barred prosecutors from using the interviews as evidence.
The U.S. Attorney's Office for Utah argued that it had determined after a careful effort that Koerber was not represented by an attorney at the time.
As part of his motion asking the judge to prohibit use of the interviews as evidence, Koerber's current attorney, Marcus Mumford, asked that prosecutors and agents who participated in the interview effort be disqualified from the case. Waddoups' Aug. 15 ruling did not directly address that point, but Mumford indicated Tuesday he was prepared to press for a decision should Walz continue to be involved.
"The defense would like to anticipate what role Mr. Walz will play in this case," Mumford told the judge.
Waddoups said the two sides should confer on that issue. Bearnson also said she did not know if the U.S. Justice Department had made a decision on whether to pursue an appeal of Waddoups' recent ruling, a move that could further delay the case.
Koerber was originally indicted in May 2009 on three fraud and tax evasion charges related to his operation of FranklinSquires Cos. and other entities.
A superseding indictment in November of that year added 19 additional charges. A third indictment in September of 2011 was issued after Waddoups said a letter prosecutors had from company files could not be used as evidence.Prosecutors had contended the letter included evidence of Koerber's intent to defraud investors.
Through seminars and other means, Koerber touted his "Equity Mill" real estate investment program and solicited investments, according to the charges. But instead of spending their funds as promised, Koerber allegedlyused about $50 million from new investors to pay existing ones to make the operation appear profitable in what is known as a Ponzi scheme. He also spent investor monies on expensive cars and homes, the charges state.
Koerber now faces 18 charges of fraud, money laundering and tax evasion after Waddoups ruled two counts of the 20-count third indictment were too vague. Koerber has pleaded not guilty.
Waddoups previously denied a Mumford motion to disqualify prosecutors and agents over the letter issue.