Quantcast
Get breaking news alerts via email

Click here to manage your alerts
(Francisco Kjolseth | Tribune file photo) Rick Koerber faces 18 criminal charges for his operation of FranklinSquires Cos. and related entities. The Utah County businessman hotly denies his businesses functioned as a Ponzi scheme, although the indictment alleges he used about half of the $100 million in funds the companies received to pay investors and make the operation appear profitable until it collapsed in 2008.
Giant Utah fraud case will be dismissed
Courts » Question is whether real estate guru will face new charges.
First Published Jun 19 2014 05:58 pm • Last Updated Jun 19 2014 10:37 pm

Five years after an indictment charged real estate investment guru Rick Koerber with allegedly orchestrating one of the biggest financial frauds in Utah history, a judge said Thursday he will dismiss the case because federal prosecutors failed to follow speedy trial requirements.

At the onset of the Thursday hearing, U.S. District Judge Clark Waddoups said the only issue remaining was whether the case could be refiled by prosecutors sometime after the dismissal becomes formal.

Join the Discussion
Post a Comment

Waddoups indicated he will toss out the 18 fraud, tax and money laundering charges because prosecutors violated the Speedy Trial Act as they pursued their case against Koerber since the first of three indictments was handed up May 26, 2009.

Koerber pleaded not guilty five years ago to the day, said his attorney Marcus Mumford, who urged Waddoups on Thursday to dismiss the case with prejudice, meaning Koerber could not face new charges. Mumford’s arguments focused on misconduct by prosecutors and investigators beginning before the first indictment.

"The court has now found the government has violated federal law in how they prosecuted this case," Mumford said after the hearing. "At some point this will end."

The lead prosecutor, Assistant U.S. Attorney Stewart Walz, told Waddoups that the delays in getting to trial were largely due to Mumford’s actions and that the victims would suffer further harm if prosecutors aren’t able to seek a new indictment. He pointed out that Koerber’s operations ­— centered around FranklinSquires Cos. and Founders Capital — took in $100 million from investors who are owed about $48 million after "Ponzi" payments were made back to them from funds provided by other investors.

"The [decision on] reprosecution has to consider the rights of victims," Walz said.

In the coming months, Waddoups will make the dismissal formal and decide on whether the charges can be refiled.

Under the Speedy Trial Act, if more than 70 days pass after the charged person first appears in court without a trial or other resolution, the case must be dismissed. However, judges can enter exemptions from that requirement because of certain time-consuming court procedures.

In Koerber’s case, Mumford argued that at least 125 non-exempt days have passed without a resolution or trial, and prosecutors did not contest Waddoups’ statement that he couldn’t now go back and grant the exemptions that they failed to seek at the time.


story continues below
story continues below

The U.S. Attorney’s Office declined to comment on the pending dismissal.

Koerber was originally indicted on three counts in 2009, with 19 additional charges added in a second indictment that November. A third indictment was sought by prosecutors after Waddoups tossed out a key piece of evidence from the first two. Since then, Waddoups also has dismissed two other counts, leaving 18.

The indictments allege Koerber promised investors returns of around 5 percent or higher per month from real estate deals. But his companies did not make profits from 2005 to 2007 and, instead, Koerber paid out around half of the $100 million in investor monies to other investors to make it appear the businesses were highly successful.

tharvey@sltrib.com Twitter: @TomHarveySltrib



Copyright 2014 The Salt Lake Tribune. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Top Reader Comments Read All Comments Post a Comment
Click here to read all comments   Click here to post a comment


About Reader Comments


Reader comments on sltrib.com are the opinions of the writer, not The Salt Lake Tribune. We will delete comments containing obscenities, personal attacks and inappropriate or offensive remarks. Flagrant or repeat violators will be banned. If you see an objectionable comment, please alert us by clicking the arrow on the upper right side of the comment and selecting "Flag comment as inappropriate". If you've recently registered with Disqus or aren't seeing your comments immediately, you may need to verify your email address. To do so, visit disqus.com/account.
See more about comments here.
Staying Connected
Videos
Jobs
Contests and Promotions
  • Search Obituaries
  • Place an Obituary

  • Search Cars
  • Search Homes
  • Search Jobs
  • Search Marketplace
  • Search Legal Notices

  • Other Services
  • Advertise With Us
  • Subscribe to the Newspaper
  • Access your e-Edition
  • Frequently Asked Questions
  • Contact a newsroom staff member
  • Access the Trib Archives
  • Privacy Policy
  • Missing your paper? Need to place your paper on vacation hold? For this and any other subscription related needs, click here or call 801.204.6100.