Several days ago, The Salt Lake Tribune raised questions about the federal court’s dismissal of the criminal case against businessman Rick Koerber. I’ve represented Koerber in that matter for almost five years. The record – 472 entries on the court docket – reveals some of the answers the newspaper is looking for.
In May 2009, when Koerber was first indicted, Utah Commerce Director Francine Giani and federal prosecutors held a press conference to congratulate themselves for pursuing the case "no matter the cost." The indictment did not identify any "victims," but Giani and others asserted that Koerber had defrauded "hundreds" with a "classic Ponzi scheme."
In June 2009, Koerber released recordings where Giani’s staff had illicitly demanded control of his business, not based on any wrongdoing, but because he had criticized them "on the radio." If Koerber refused, they threatened to accuse him falsely of running a "Ponzi scheme." An internal government memo later revealed how those responsible for the case knew their allegations were "long on conclusions, but short on facts," but planned to compensate by using negative publicity to encourage "investors" and the public to turn against Koerber.
When we presented this evidence to the court, Judge Waddoups wrote that he was "troubl[ed]" by the government’s "internal scheme to prejudice" Koerber.
In February 2010, Koerber challenged the substance of the government’s case, including false testimony from a disgruntled former employee that Koerber had mailed misrepresentations to "victims" in 2005. Koerber disproved those allegations with forensic computer metadata and sworn declarations from the alleged "victims." And Judge Waddoups concluded that the government’s primary witness was "not credible," leading to dismissal of the first and second indictments.
In September 2011, federal prosecutors responded by filing a third indictment, with allegations even more vague, this time based on the testimony of a single IRS agent. Pointedly, they refused to ever give Koerber a copy of that agent’s testimony.
Judge Waddoups questioned the vagueness of the third indictment, pointing out that "none" of the legally necessary who, what, when, and where were "spelled out." Prosecutors argued they didn’t have to identify any actual victims or spell out the specifics of the accusations, as it was enough to plead them "generically." Pointing out that the indictment "would fail on its face in a civil action," the court wondered how the vague indictment was "sufficient in a criminal case to put a person in jeopardy of his liberty and money." The government never addressed these concerns, and earlier this month the court said they had only become "more pronounced" over time.
From 2012 through 2013, the court applied increased scrutiny to actions the government had taken against Koerber before the case was filed, including how it "committed" to prosecute Koerber before it determined what for. After several evidentiary hearings, the court chastised prosecutors and agents for having "intentionally violated" ethical rules, federal law, and Koerber’s constitutional rights in their efforts "to secure an indictment in the first instance." Those prosecutors tried to appeal that decision, as is their right, but were overridden by their superiors in D.C., who ordered them to dismiss the appeal.
Koerber was pursuing those issues in the case, when a few months ago, prosecutors were forced to admit they had yet again violated federal law – the Speedy Trial Act. After considering the "sordid history" of the case and the government’s "pattern of widespread and continuous misconduct," Judge Waddoups dismissed the case with prejudice because to "allow the government a fourth chance to re-indict would be unjust, unjustified, and a tacit form of tolerating this kind of prosecutorial misconduct."
I saw where Giani said the ruling was based on the judge’s "personal dislike" for the lead prosecutor. The state of Utah should knows better: Judge Waddoups has a reputation of being careful, fair, and conservative. He tolerated the government’s actions for more than five years, until he could no longer deny how its "pattern of misconduct" had "fundamentally compromised" the entirety of the case, and he dismissed to "prevent the erosion of citizens’ faith in the evenhanded administration of the laws."
This is why The Tribune was wrong to suggest that the case did "not end with a legal resolution deciding Koerber’s innocence or guilt." It did. Mr. Koerber is presumed innocent, and remains so. Full stop.
Those who pursued this case as they stated, "no matter the cost," should be held accountable. In the meantime, Utahns should take solace in the fact that, if they ever find themselves falsely accused, Utah has federal judges who take seriously their constitutional duty to protect the rights of free citizens from an unhinged and ill-motivated prosecution.
Marcus R. Mumford is a Salt Lake City attorney.
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