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Real estate fraudster Rick Koerber wants out of prison because of the coronavirus

(Steve Griffin | The Salt Lake Tribune) Former real estate guru Rick Koerber stands with his family outside the Federal Courthouse in Salt Lake City, as he talks with the media, after a federal jury announced they were deadlocked over the allegations against him. Koerber was accused of illegal business dealings and running a Ponzi scheme. U.S. District Court David Nuffer declared a mistrial in Salt Lake City Monday October 16, 2017.

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Convicted real estate fraudster Rick Koerber is trying to get out of prison, arguing his health is at risk because of the coronavirus pandemic — but federal prosecutors say he’s a liar and shouldn’t be believed about the conditions in his California prison cell.

Koerber in October was sentenced to spend 14 years in federal prison for fraud, wire fraud and money laundering.

A week ago, his attorney filed a motion asking that Koerber be released after serving just 10 months, and be allowed to continue serving time with an ankle monitor at his rural Utah home with his family. If he remains in the federal lock-up, attorney Dick Baldwin wrote, it could become a “death sentence” for Koerber. He doesn’t have the virus, Baldwin wrote, but is at higher risk because of underlying health conditions.

“Prisons are not sealed off from the outside world,” the attorney wrote. “By their nature, people move in and out constantly — from correctional and medical staff, to family and attorneys, to those serving short sentences or finishing longer ones.”

Baldwin noted in an additional motion filed Wednesday that there has now been one coronavirus-related death at the facility where Koerber is staying. Fifteen other federal prisoners have died, and 449 inmates and 280 staff in federal prisons nationwide have contracted the virus.

There are no federal prisons in Utah, so Koerber is housed in a facility in San Pedro. Koerber has told his attorneys that he lives in a dorm with just under 100 other inmates, some of whom have been coughing and running fevers. Social distancing is impossible, he said, and “many inmates have resorted to sleeping with blankets over their head and face in an attempt to protect against infection.”

His attorneys are asking that he be allowed to go home to Grouse Creek, a rural area in northwestern Utah.

But federal prosecutors note that this is far from the first time Koerber has asked to be let out from behind bars — it’s his seventh attempt. In the past, he’s also asked for release after he said inmates threatened his safety over phone privileges and he’s asked to remain free while his conviction appeal is pending.

“While the COVID-19 pandemic is an unprecedented global crisis, it does not warrant Koerber’s release,” they wrote. “The United States is mindful of the concerns created by COVID-19, and the Bureau of Prisons is making extraordinary effort both to protect the inmate population and to address the unique circumstances of individual inmates.”

Federal prosecutors say Koerber needs to wait for prison officials to decide if he will be granted compassionate release — and a judge doesn’t have the authority at this point to do so. They chalk up his concerns and observations in his prison facility to “prison yard rumors” and argue in court papers that Koerber has a “real credibility problem,” and should not be believed.

"Dishonest behavior," they argue, "is, sadly, a hallmark of Koerber’s history and character."

The federal Bureau of Prisons says it is currently reviewing "all inmates who have COVID-19 risk factors" for the possibility of home confinement. It has released more than 1,000 inmates to home confinement as of Thursday.

Koerber pitched himself as a sort of real estate savant, who took money from investors saying he would use it for real estate deals. But prosecutors say he spent much of it on a hamburger franchise, funding a sexy horror movie and personal expenses like luxury cars and minting his own coins. They also accuse the businessman of taking money from new investors to pay interest to previous investors to make the enterprise seem profitable.

Defense attorneys had argued at trial that Koerber did not make his business plan with the idea of scamming those around him, but said the housing market crash in 2008 affected his business.

It took federal prosecutors 10 years to put Koeber behind bars — most of that he spent free on bail. He was originally indicted on similar charges a decade ago, but his attorney disputed how federal agents and prosecutors investigated Koerber, and a federal judge threw out much of the evidence in that case in 2011 and 2013. The judge later dismissed the case.

Prosecutors appealed part of the dismissal to the 10th Circuit Court of Appeals, and the case was sent back to Utah for reconsideration. That process led to a January 2017 indictment, ending in a mistrial that fall after the jury could not reach a verdict. Federal prosecutors retried the case, and Koerber was convicted last September of 15 crimes.

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