Nine years after he was first indicted, Rick Koerber took the witness stand on Monday in his federal court trial and testified about the origins of his companies and the real estate investment strategy that are at the center of charges against him.
Koerber was the first witness called by the defense after federal prosecutors rested their case, following four weeks of witnesses and testimony about Koerber’s companies. The businesses took in nearly $100 million from investors and loans in what a grand jury indictment alleges was a Ponzi scheme.
Koerber is now facing 17 charges after U.S. District Judge Robert Shelby dismissed one count of wire fraud. Prosecutors did not put on a witness to support that charge and they asked Shelby to dismiss it after Koerber defense attorney Marcus Mumford started to argue for dismissal of all charges. Shelby took under advisement Mumford’s motion to dismiss the other counts as well.
Koerber, 44, testified for about two hours on Monday under questioning from Mumford and is to return to the witness stand on Tuesday.
Koerber said he came to Utah from his home state of Wyoming after shutting down his Internet services company in 2001. Koerber said he wanted to become a seminary teacher for the LDS Church in Utah but was told his bankruptcy raised questions about his character.
He took a job at FranklinCovey Co., where he was a telemarketer for a course on real estate investing by a “guru” named Carlton Sheets.
Koerber said he eventually quit that job and struck out on his own to build a company that taught a philosophy about capitalism and personal responsibility. Koerber said he cribbed from Sheets, Stephen Covey, Norman Vincent Peale, Milton Friedman and others. He also began charging for courses on real estate investing.
“I thought I had a kind of new awakening in terms of capitalism,” Koerber said.
The principles he expounded had to do largely with taking personal responsibility for decisions, particularly economic ones.
“If you‘re going to enter in a business relationship, be responsible for what you’re doing,” Koerber said in explaining one of his “13 Principles of Prosperity.”
The final prosecution witness was IRS agent Steve Roberts, who testified about the two charges of tax evasion that Koerber faces.
Roberts said he took the transfers of money to Koerber that were on his companies’ books — $996,362 in 2005 and $675,607 in 2006 — and put them into a computer program the IRS uses to determine possible tax liabilities.
The program showed Koerber owed nearly $300,000 for 2005 and about $195,000 for 2006, the years in which the indictment says Koerber failed to file personal returns and to pay taxes he owed.
Another Koerber attorney, Amanda Mendenhall, asked whether Roberts’ figures took into account the losses that Koerber’s companies had incurred that might offset his tax bill. Roberts said he had not, but Assistant U.S. Attorney Stewart Walz pointed out such questions could be answered if Koerber had filed returns.
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