Feds file new indictment in Koerber investment fraud case , Colaboration by Robert Paisola WC Media USA

Before you read this, please read our statement:
http://franklinsquires.blogspot.com/2011/08/our-public-statement-on-c-rick-koerber.html

The Indictment from The US Attorney Website: Not too much different... Look at the Date... 2009? Is this just a rehash of the old stuff.. Looking at the Justice Department Memo (below) ...YEP
http://www.justice.gov/usao/ut/caseupd/documents/koerber%20superseding%20indictment.pdf


"There are no substantive changes in the superseding indictment. Changes were made to the section of the indictment describing the scheme and artifice to defraud. In addition, Count 1 of the previous indictment was eliminated following a ruling by U.S. District Judge Clark Waddoups that documents which formed the basis of Count 1 were protected by the attorney-client privilege."


The Official United States Justice Department Statement
http://www.justice.gov/usao/ut/press/releases/Koerber%20second%20ss%20indictment%20statement.pdf



The Salt Lake Tribune
Published: September 29, 2011 08:48PM
Updated: September 29, 2011 11:53PM

Francisco Kjolseth | Tribune file photo Rick Koerber, accused of massive fraud in Utah County shows up to Federal Court in Salt Lake City in January 2010 for a status hearing alongside his wife, Jewel Skousen. The federal government on Thursday filed a new indictment against Koerber after a judge threw out a key piece of evidence in case over an alleged investment scam that took in more than $100 million.

A federal grand jury on Thursday returned a new 20-count indictment alleging Utah County businessman Rick Koerber engaged in widespread investment and tax fraud.

The indictment follows a federal judge’s decision in July to throw out a key piece of evidence in Koerber’s case, in which he is accused of running an investment scam that took in more than $100 million.

Assistant U.S. Attorney Stewart Walz previously said the ruling by U.S. District Judge Clark Waddoups affected a “significant” part of an existing 22-count indictment alleging fraud, money laundering and tax evasion by Koerber in his operation of FranklinSquires Cos. and related real-estate investment businesses.

Waddoups’ decision forced prosecutors to seek a new indictment, which was filed Thursday, said Melodie Rydalch, public information officer for the U.S. Attorney’s Office.

“There are no substantive changes in the superseding indictment,” Rydalch wrote in a statement. She said small changes were made to a section of the indictment describing the alleged “scheme and artifice to defraud.”

Count one of the first indictment was deleted after Waddoups’ ruling, which found documents that formed the basis of count one were protected by attorney-client privilege, Rydalch said.

The indictment accuses Koerber of operating a Ponzi scheme in which money from new investors was used to pay initial and previous investors to make the businesses appear profitable and to continue to attract new money.

Waddoups’ previous ruling stated a draft letter Koerber had prepared for major investors was subject to attorney-client privilege and couldn’t be used against him. The government contended the letter had been sent to investors in the real-estate company, but Waddoups said testimony from Koerber and other sources indicated the letter was never sent out and remained confidential communication between Koerber and attorneys.

Waddoups said in his ruling that a government witness, Koerber’s former personal assistant, was not credible when she testified she mailed out the letter on Koerber’s instructions.

The letter has not been placed in the court record nor read in open court, but testimony and court filings indicate it had to do with how investors’ funds would be used.

Koerber was originally indicted on three counts in May 2009, but 19 additional charges were added in a previous superseding indictment in November of that year.

Koerber was considered something of an investment guru in Utah County, where he charged large fees for seminars and classes about investing in real estate using procedures he called “equity milling.” But prosecutors also said he lured in hundreds of investors with promises of high returns before the companies collapsed when the nation’s real-estate bubble burst in 2008.

The indictments allege he used about half of the $100 million to pay back initial investors and also spent funds on investments other than real estate.

Koerber’s attorney, Marcus Mumford, contends the government has no evidence that Koerber promised investors one thing and did something else.

mrogers@sltrib.com

Twitter: @mrogers_trib

—

Koerber partner faces tax charge

Gabriel S. Joseph, a partner with Rick Koerber in the FranklinSquires Cos., also faces federal charges. Joseph was charged in April with two misdemeanors for allegedly failing to file tax returns for 2004 and 2005. He has pleaded not guilty, and a trial is set for December.


This is another Article on this Matter:
Utah County businessman indicted in federal court, again
Story
Discussion


Jim Dalrymple - Daily Herald | Posted: Friday, September 30, 2011 12:01 am | No Comments Posted
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SALT LAKE CITY -- A federal grand jury has returned a second superseding indictment against a Utah County businessman accused of tax fraud.

The indictment charges Rick Koerber with six counts of fraud in the offer and sale of securities, 10 counts of wire fraud, two counts of money laundering and two counts of tax evasion. A federal court news release states that one count from a previous indictment was eliminated because a document on which that count was based could not be used in court.

Court documents state that Koerber used several different businesses and Ponzi schemes to bilk investors out of their money. The case was filed in 2009, and Koerber initially was charged with three counts -- mail fraud, wire fraud and tax evasion. Additional criminal charges were filed later for his alleged involvement in a $100 million Ponzi scheme.

According to Koerber's charging documents, Koerber carried out his scheme between 2004 and 2008. The documents state that he used a real estate program he dubbed an "Equity Mill" to convince investors that they could make significant amounts of money. He attracted new investors with magazine advertisements that promised investors they could make money without ever buying property, the documents reveal. He also reportedly claimed that the so-called investments were risk-free.

But the money he took in through his Founders Capital company reportedly was not used for the Equity Mill -- as he claimed it would be -- and other companies Koerber ran were not profitable. Koerber was aware of those facts, the documents assert, but intentionally misled investors.

Koerber also is accused of using investor money improperly. The documents state that he spent more than $800,000 on restaurants, $1 million on expensive cars, $5 million making a movie, $425,000 minting coins and hundreds of thousands of dollars on other expenses. The documents ultimately assert that Koerber took in more than $100 million in investor funds, and used more than $50 million to make Ponzi payments.

Koerber's new indictment comes after a judge prohibited prosecutors from using a letter Koerber wrote in the past. Koerber argued that the letter was protected by attorney-client privilege, while prosecutors believed he had used it to mislead investors.

Koerber's attorney, Marcus Mumford, has said that he believes the allegations are baseless. He pointed out that a key witness for the prosecution turned out not to be credible. Mumford also said the entire case has been built on unsupported facts and conclusions.
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Copyright 2011 Daily Herald. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Posted in Crime-and-courts, Alpine, Jim-dalrymple on Friday, September 30, 2011 12:01 am Updated: 12:15 am. | Tags: Alpine, Crime, Fraud, Federal Court, Tax Evasion, Rick Koerber




SALT LAKE CITY -- Federal prosecutors plan to file a new, or superseding, indictment against an Alpine businessman after a judge ruled that a letter the man wrote cannot be used in court.

Melodie Rydalch, spokeswoman for the U.S. Attorney's Office in Utah, said that the federal government's first count against Rick Koerber is based on a specific document that U.S. District Judge Clark Waddoups ruled Tuesday is privileged. As a result, prosecutors cannot use that document and will seek the superseding indictment. Rydalch did not say what new charges Koerber may face.

Koerber had faced 22 charges related to tax evasion and fraud. Court documents state that Koerber used several different businesses and Ponzi schemes to bilk investors out of their money. The case began in 2009 and Koerber initially was charged with three counts -- mail fraud, wire fraud and tax evasion. Nineteen additional criminal charges were filed later for his alleged involvement in a $100 million Ponzi scheme.

Rydalch stressed Tuesday afternoon that seeking a superseding indictment is a routine procedure and does not mean prosecutors were dismissing the case. She added that prosecutors remain confident in the case.

But defense attorney Marcus Mumford described Tuesday's developments as a victory for Koerber. He said that the government's decision to seek a superseding indictment stemmed from a ruling Waddoups issued in June and which prohibited prosecutors from using a letter Koerber had written. Koerber argued that the letter was protected by attorney-client privilege, while prosecutors believed he had used it to mislead investors.

After a key witness for the prosecution was found to be not credible, Waddoups sided with the defense. Mumford added government investigators never found anyone who received the letter during a three-year investigation.

Mumford also said that the entire case has been built on unsupported facts and conclusions, and added that he anticipates the superseding indictment to be the same.

"We'll be interested in how the government changes its theory here," he said. "We expect that it will be faulty."

Koerber's next hearing is scheduled for Oct. 7.
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Copyright 2011 Daily Herald. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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Posted in Crime-and-courts, Alpine, Jim-dalrymple on Wednesday, August 3, 2011 12:14 am Updated: 2:35 pm. | Tags: Alpine, Crime, Ponzi Scheme, Fraud, Tax Evasion, Rick Koerber, Federal Court, Melodie Rydalch

Our Public Statement on The C Rick Koerber Federal Court Decision, Robert Paisola Reports

To our friends in the media and around the world:

Please understand that the federal court ruling for Claud R Koerber is clearly noted. As many of you know, we have been working on this matter for over three years. You may also note that we have stated in open forums and dialogue that after we spent OVER SIX MONTHS reviewing the data and the documents on the case, and spent time with Koerber, we were also forced to immediately reverse our previous statements, as the fundamental data simply was not there. We thank you for your comments and you need to clearly understand that Western Capital is now based in Las Vegas Nevada. This is where we are spending our time. We can not, nor we issue statements on the Rick Koerber Case, other than to say, "Koerber is one of the most advanced legal minds in the country, and the evidence starts and stops at the Federal Trial Court Level. America, Simply look at his RESULTS."
To your success,
The Western Capital Team
Las Vegas Nevada USA

From The Salt Lake Tribune

Watch the interview with Rick Koerber and KUTV's Brian Mullahy



Watch the interview with Robert Paisola and Rick Koerber (Copyright 2011)




Koerber's Statement and Comments

"For the record - the link below - has been re-written by the Salt Lake Tribune after they were contacted by the government - who evidently didn't like the story very much. So, what you see now is the "clean" gov't propaganda version. The Salt Lake Tribune should be ashamed. As I've said before, they are essentially the PR arm of the government. I'll post the "whole" story on my blog at rickkoerber.com"

 

By Tom Harvey

The Salt Lake Tribune

A prosecutor said Monday the federal government has been forced to seek a new indictment against Utah County businessman Rick Koerber after a judge threw out a key piece of evidence in a case involving an alleged investment scam that took in more than $100 million.

Assistant U.S. Attorney Stewart Walz told a federal magistrate that the ruling last month by U.S. District Judge Clark Waddoups affected a "significant" part of an existing 22-count indictment alleging fraud, money laundering and tax evasion by Koerber in his operation of FranklinSquires Cos. and related real-estate investment businesses.

A new federal grand jury indictment should take 30 days to 60 days to hand up, Walz told U.S. Magistrate Sam Alba at a hearing that had been convened to set deadlines and a trial date for Koerber. The existing indictment says Koerber ran what allegedly was largely a Ponzi scheme in which money from new investors was used to pay initial and previous investors to make the businesses appear profitable and to continue to attract new money.

Koerber’s attorney, Marcus Mumford, said the decision means the charges against Koerber will be dismissed as a procedural matter if prosecutors convince a grand jury to hand up a new indictment.

"They have to come up with a new theory in the case," said Mumford. "They have to go to the grand jury and present new and different evidence to support this theory."

Waddoups ruled last month that a draft letter Koerber had prepared for major investors was subjected to attorney-client privilege and couldn’t be used against him. The government contended the letter had been sent to investors in the real estate company, but Waddoups said testimony from Koerber and other sources indicated the letter was never sent out and remained confidential communication between Koerber and attorneys.

The decision to seek a new indictment does not mean prosecutors have a weak case, said Melodie Rydalch, spokeswoman for the U.S. Attorney’s Office for Utah.

"We have represented to the court that we may refine some counts in the current indictment and add additional counts in a superseding indictment," she said. "What we intend to do is necessitated by the court’s privilege ruling, not by any concern over the merits of the case."he charged large fees for seminars and classes about investing in real estate using procedures he called "equity milling." But prosecutors also said he lured in hundreds of investors with promises of high returns before the companies collapsed when the nation’s real estate bubble burst in 2008.

The indictments allege he used about half of the $100 million to pay back initial investors and also spent funds on investments other than real estate.

Mumford contends the government has no evidence that Koerber promised investors one thing and did something else.

Claud 'Rick' Koerber carries on despite Ponzi scheme charges, Robert Paisola Reports

HIGHLAND — It's clear, just from the words he uses, that the line has been drawn in the sand.

This is a battle. A fight. This is the government versus the businessman. And while Claud "Rick" Koerber, 36, thinks it's quite a compelling story, he said it would be more interesting if this conflict weren't also his life.

Though he has been accused by the government of running a Ponzi scheme that bilked investors of $100 million, Koerber is undeterred. He's not repentant because he says he's not guilty. He believes in the money he made and the company he built. He intends to fight the battle and emerge victorious.

"The rules of the justice system are that you can fight," he said. "It's the fundamental thing that makes a free society more attractive. Just because the government accuses you, it doesn't mean it's true. I'm proud of my business. I'm proud of what we did. I think that what we did was amazing."

Koerber made a name for himself as the "Free Capitalist," a radio personality who leans Libertarian politically, is objectivist in his philosophy and capitalist when it comes to economy. Wednesday, he relaunched his Free Capitalist Project, which involves the continuation of his radio show, features an updated Free Capitalist Web site and another site of Koerber's personal blog.

More than anything, he said he is someone who believes in responsible, accountable citizens who turn to themselves — not their government — for solutions. Even in the face of their failures. And that is what the Free Capitalist is about.

Koerber said people were once allowed to go out on a limb, say, make a business investment and fail. But they now look for a place to point the blame, and quite a few fingers are pointing his way.

Koerber was hit with a three-count indictment in May 2009 charging him with mail fraud, wire fraud and tax evasion. In November, a grand jury handed down a new indictment that includes a total of 22 counts and additional charges of fraud in the offer and sale of securities, sale of unregistered securities, money laundering, and additional counts of both wire fraud and tax evasion.

If convicted of every count, he faces a maximum of 285 years in prison — more than someone might receive even for killing someone, Koerber pointed out.

The business ventures, he said, were always a side project. Prosecutors believe he solicited investors and then encouraged them to "act and think like a bank." The groups of investors were supposed to recruit other investors, all under Koerber's assurance that their investments were "backed, collateralized or secured by real property," the indictment against him states.

Koerber was involved with several businesses in Utah, including Founders Capital, Franklin Squires Investments and Franklin Squires Companies. Prosecutors say Koerber operated a Ponzi scheme to make it appear as though these companies were turning a profit to secure more investors, yet "at no time during the operation of the scheme did the Founders Capital or Franklin Squires … turn a profit."

Koerber said the term "Ponzi scheme" was used by a government looking to depict the issue with a "big, broad brush." He insists it wasn't a Ponzi scheme at all. He says his business took the same hits most other businesses did in the current economic downturn, yet his business was also affected by what he believes were lies spread by the government.

A moviemaking venture that, according to the indictment, cost about $5 million wasn't a failed project, Koerber said, merely one that hasn't seen completion. He said they're still hoping the movie will be bought and marketed.

He believes the company would have gained back what it lost, if not for the disruption and controversy caused by the indictment.

"We never would have stopped," he said. "We would have survived but for the government's reaction. You can't survive both the economic collapse and the government saying you're a fraud, a schemer."

Koerber said he never would have taken a hiatus from his Free Capitalist project, either, but he spent 2009 dealing with "this new problem" and sorting through his priorities. He chose his own attorney and underwent a divorce in November. He is now remarried and has custody of the couple's three children, though he and his first wife remain good friends and she sees the children often.

Koerber is not prohibited by the terms of his pretrial release from starting or heading up any business ventures. Within those terms, the judge ordered that Koerber actively seek employment, appear at all court hearings relevant to his case and that he not violate any federal or state laws. Melodie Rydalch, spokeswoman for the U.S. Attorney's Office, said her office could not comment on Koerber as the case is still pending in federal court.

As soon as he had the time, Koerber returned to the project and is determined to carry it on. In the meantime, he is certain that, when it comes to the charges against him, the truth will win out.

"The story you tell over time is going to change. There's really no way to see an indictment as a positive. I got indicted. That sucks, but time is on the side of truth. Everyone has an interest in seeing what happens."

COMPLIMENTS OF THE DESERET NEWS

Re-Launching Free Capitalist Radio : FreeCapitalist Daily, by Rick Koerber , Robert Paisola Reports

Re-Launching Free Capitalist Radio

January 21, 2010 by FCD Administrator
Filed under Current, Featured, Principle 13


Re-Launching Free Capitalist Radio. Episode Theme : The Project, Basic Principles of Capitalism, and a Tribute to Dr. W. Cleon Skousen.

The episode focuses heavily on the basic principles of capitalism. Comments about President Obama’s recent remarks about “losing touch with Americans” and a syllogism of Ayn Rand related to Individual Rights, Property Rights, and Liberty.

http://www.freecapitalistdaily.com/2010/01/re-launching-free-capitalist-radio/1078

EXCLUSIVE- THE RICK KOERBER 22 COUNT INDICTMENT LIVE! Robert Paisola Reports

Worldwide EXCLUSIVE

For Immediate Release
CNN I REPORT
ROBERT PAISOLA REPORTS LIVE
FOR WESTERN CAPITAL MULTIMEDIA
Los Angeles, California November 12, 2009 1:00 PM PST

DOWNLOAD THE FULL INDICTMENT HERE!

To our friends around the world:

Since we released the news yesterday that Rick Koerber (Claud R. Koerber) was charged by a Federal Grand Jury on November 09, 2009 with a 22 count Superseding Indictment, we have been trying to get a copy of the indictment for you, our listeners, viewers and readers to review. It appears that the US Attorney in Utah issued a press release announcing the additional charges and "forgot" to file the document in the court!

This is the document that was obtained from the United States Attorneys Communications Liaison:







After going through many layers of government, we were able to get a copy for YOU, the American Public to review!

If you look on PACER, the OFFICIAL COURT RECORD, there is no entry showing this document. Why is that? We will bring you more on that story as soon as we receive additional details, in the interim, here is a link to the official indictment that was never released! How is this possible? Does not the Defendant have a right to see the indictment prior to reading about a document that is not even recorded in the National Media?

DOWNLOAD THE FULL INDICTMENT HERE!

Send comments to Confidential@FRANKLINSQUIRESLAWSUIT.COM

THE TEXT FOR OUR FRIENDS AT GOOGLE!

F1L..ED

U.S. DiSTRICT COURT

BRETI'L. TOLMAN, United States Attorney (#8821) STEWART C. WALZ, Assistant United States Atton¥OO't1tml74)) P 4: 43 TREY MAYFIELD, Assistant United States Attorney (PrOVisionally Admitted)

IN THE UNITED STATES DISTRICT COURT DISTRICT OF UTAH, CENTRAL DIVISION

UNITED STATES OF AMERICA,

Plaintiff,

v.

CLAUD R. KOERBER aJkJa RICK KOERBER,

Defendant.

Case No. 2:09-CR-00302-TS

SUPERSEDING INDICTMENT

VIO. 18 U.S.C. § 1341 (Mail Fraud); 15

U.S.c. §§77q(a) and 77x (Fraud in the Offer and Sale ofSecurities); 15 U.S.C. §§71e(c) and 77x (Sale ofUnregistered Securities); 18 U.S.C. § 1343 (Wire Fraud); 18 U.S.C. § 1957 (Money Laundering Transactions); 26

U.S.C. §-7201 (Tax Evasion)

The Grand Jury charges: The Defendant and His Businesses At all times relevant to this indictment:

1. Defendant CLAUD R. KOERBER (a.k.a. RlCK KOERBER) was an individual with decision making authority over several businesses located in Utah.

2. Founders Capital, LLC (Founders Capital) was a Utah Limited Liability Company fonned in or around April 2005 and associated with Defendant KOERBER. Founders Capital

received investment monies, sometimes termed as loans, from victims of the scbeme and artifice to defraud alleged below.

3. . Franklin Squires Investments, LLC, and Franklin Squires Companies, LLC, were Utah limited liability companies associated with Defendant KOERBER and Founders Capital.

The Scheme and Artifice to Defraud

4. From on or about an unknown date in 2004 to on or about December 31, 2008, in the Central Division of the District of Utah and elsewhere, Defendant KOERBER devised and intend to devise a scheme and artifice to defraud and for obtaining money by means offalse and fraudulent pretenses, representations, and promises. In execution of th~ scheme to defraud, Defendant KOERBER used the United States mails, interstate wire transmissions, and the facilities and means ·of interstate commerce.

5. Beginning around 2004, Defendant KOESER created and presented a series of seminars designed t,o encourage individuals to make money through a real estate program that Defendant KOERBER named the "Equity Mill." It was a part ofthe scheme and artifice to defraud tbat Defendant KOERBER accepted money from individuals and companies through Founders Capital, and with the representation that Founders Capital would use the money to make "bard money" or bridge loans to other entities associated with Founders Capital, namely

...•.

Hill Erickson LLC (Hill Erickson), and New Castle Holdings LLC (New Castle), for the purpose ofacquiring real property for use in the "Equity Mill."

6. Defendant KOERBER communicated his misrepresentations and omissions regarding his schemes, both directly and indirectly, to the different levels ofinvestors and potential investors through various means, including his seminars, phone calls, mailings, and advertisements. Defendant KOEBER made such misrepresentations and omissions to colleagues and intermediaries with the knowledge that such information would be disseminated to other

.investors and potential investors.

7. It was further a part ofthe scheme and artifice to defraud that Defendant KOERBER represented to investors and potential investors that through the "Equity Mill," substantial amounts of money could be made. Defendant KOERBER paid varying amounts of interest on the money provided to Founders Capital,·but most generally 5% per month to its first line investors.

8. It was further a part ofthe scheme and artifice to defraud that the Defendant.

KOERBER caused advertisements to be placed -in "Creative Real Estate Lifestyles" and "Prosperity lifestyles" magazines during 2006 and 2007. The advertisements for Franklin Squires, an entity related to Founders Capital, stated, "Let us show you How to Safely Earn 1-5% Per Month on Your Cash. How to make GREAT MONEY fast in real estate without EVER buying property." The Defendant KOERBER knew these ads were false and misleading because Franklin Squires never made a profit in 2005, 2006 and 2007 and in fact lost money in those years, that the 1-5% paid on investors' money carne from other investors' money as described below, and that the money invested was not safe.

9. It was further a part of the scheme and artifice to defraud that Defendant 3

KOERBER told investors that the investment was risk free or that there was little risk because the investments were backed by real estate.

10. It was further a part ofthe scheme and artifice to defraud that Defendant KOERBER represented to investors and potential investors, "Founders Capital, LLC provides the opportunity to the families to loan their funds directly to Founders Capital, LLC in exchange for an aggressive interest payment and a high degree ofliquidity. Founders Capital, LLC then re­loans the money to parties that meet Founders Capital, LLC lending criteria."

11. It was further a part of the scheme and artifice to defraud that Defendant KOERBER also represented to investors and potential investors that the funds loaned to Founders Capital, "Are usually backed, collateralized or secured by real property ofgreater or substantially similar value. The monies are then used by the entities such as Founders Capital, LLC as 'short term' financing to acquire and improve real property investments prior to obtaining more permanent cost effective financing."

12. It was further a part of the scheme and artifice to defraud that Defendant . KOERBER represented to investors and potential investors, "when individuals or families make loans to Founders Capital, LLC typical interest rates on the loaned funds ... range between 1­10% a month .... Typical levels ofsecurity or collateralization range between 50% and 150%."

13. It was further a part of the scheme and artifice to defraud that Defendant KOERBER knew the above representations were false, or, made these representations false by taking substantial amounts of the money invested with Founders Capital and using it for purposes

other than real estate bridge loans and to purchase real property. Furthennore, most of the money placed with Founders Capital was not secured or collateralized by real estate.

14. It was further a part ofthe scheme and artifice to defraud thatDefendant KOERBER knew that most of the money placed with Founders Capital was not used for real estate purchases and knew that a substantial amount of the money was diverted for other purposes because Defendant KOERBER almost exclusively controlled the use of the funds placed into Founders Capital.

15. It was further a part ofthe scheme and artifice to defraud that Defendant KOERBER used money for purposes not disclosed to the investors and potential investors with Founders Capital, such as for Defendant KOERBER's personal housing, expensive automobiles, investments into restaurants, and investments into other businesses. For example, Defendant KOERBER caused over $850,0000 to be spent on restaurants, $800,000 to be loaned to an associate for a restaurant, and over"$l,OOO,OOO to be spent on expensive automobiles. In addition, Defendant KOERBER caused over $5 million to be spent making a movie.

16. It was further a part ofthe scheme and artifice to defraud that in order to convince earlier investors that their funds were earning money and to convince potential investors that the program was working and earning money, Defendant KOERBER operated the businesses of Founders Capital and related entities as a "ponzi scheme". That is, Defendant KOERBER used money placed with Founders Capital to make interest payments to earlier investors. In this way, Defendant KOERBER created the false impression that the businesses were profitable, that the investments were safe, secure, and that interest was being paid.

17. At no time during the operation of the scheme did the Founders Capital or Franklin Squires entities operated by Defendant KOERBER make a yearly profit. Defendant KOERBER, by means of his misrepresentations and omissions, obtained approximately $100 million in investor funds. It was further a part of the scheme and artifice to defraud that over $50 million ofthose investor funds were used to make ponzi payments.

18. It was further a part ofthe scheme and artifice to defraud that despite the fact that

neither Founders Capital nor Franklin Squires made a profit in 2005, 2006 and 2007, the Defendant KOERBER falsely and fraudulently stated in an article distributed to investors and potential investors that in 2005, the Franklin Squires Companies did $1 n million in revenue and in 2006, the Franklin Squires Companies and the businesses in which Franklin Squires had a substantial interest generated revenues in excess of$500 million.

19. It was further part ofthe scheme and artifice to defraud that the Defendant

KOERBER created a false aura ofsuccess by buying expensive cars, showing photographs of his mansion, claiming that a large "cabin" near Heber, Utah was his second home, despite the fact that he did not own it, and minting his own gold coins. This aura was used to gain credibility with investors and potential investors and induce investments.

20. It was further part of the scheme and artifice to defraud that the Defendant

KOERBER told investors and potential investors that he had gotten in trouble with the Wyoming Division ofSecurities and had gone bankrupt, but had paid all of his investors in Wyoming back without disclosing that he had used some ofthe money investors placed with Founders Capital to make the repayments.

Countt 18 U.S.c. § 1341 (Mail Fraud)

21. The allegations of the Scheme and Artifice to Defraud are incorporated by this reference as though fully set forth herein.

22. On or about July 20, 2005, in the Central Division of the District of Utah,

CLAUD R. KOERBER, Defendant herein, having devised and intended to devise a scheme and artifice to defraud, and for obtaining money and property by means of false and fraudulent pretenses, representations, and promises, and for the purpose ofexecuting said.scheme and artifice to defraud and attempting to do so, did cause to be deposited in an authorized depository for mail matter a letter addressed "To Our Lenders" which contained many of the false and fraudulent representations alleged in the Scheme and Artifice to Defraud; all in violation of 18 V.S.c. § 1341 and 18 U.S.C. § 2(b).

Count 2 through 7 15 U.S.C. §§ 77q(a) and 77x (Fraud in the Offer and Sale of Securities)

23. The allegations of the Scheme and Artifice to Defraud are incorporated by this reference as though fully set forth herein.

24. .Onoraboutthedateslistedbelow,intheCentralDivision oftheDistrict ofUtah,

CLAUD R. KOERBER, Defendant, willfully, in the offer and sale of securities, that is investments in Founders Capital, by the use of the means and instruments of transportation and communication in interstate

commerce and by the use ofthe mails, directly and indirectly. (l) Did employ a device, scheme, and artifice to defraud; (2) Did obtain money by means ofuntrue statements ofmaterial fact and omissions to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleadihg; (3) Did engage in transactions, practices, and courses ofbusiness which operated as a fraud and deceit upon investors; all in violation of 15 U.S.C. § 77q(a) and § 77x (securities fraud) and 18 U.S.C. § 2(a) and (b) (aiding and abetting and causing):

Count 8 15 U.S.c. §§77e(c) and 77x; (Sale of Unregistered Securities)

25. The allegations ofthe Scheme and Artifice to Defraud are incorporated by this reference as though fully set forth herein.

26. On or about from July 2005 until December 2008, in the Central Division ofthe District of Utah,

CLAUD R. KOERBER, Defendant, willfully, directly and indirectly, by the use ofthe means and instruments of transportation and communication in interstate commerce and of the mails did offer to sen a security and cause others to offer to sell a security,lhat is, 'an investment in Founders Capital, without a registration statement being in effect as to that security; all in violation of 15 U.S.c. § 77e(c) and § 77x, and 18 U.S.c. §§ 2(a) and 2(b).

Count 9 through 17 18 U.S.c. § 1343 (Wire Fraud)

27. The allegations ofthe Scheme and Artifice to Defraud are incorporated by this reference as though fully set forth herein.

28. On or about the dates listed below, in the Central Division of the District of Utah,

CLAUD R. KOERBER, Defendant herein, having devised and intended to devise a scheme and artifice to defraud, and for obtaining money and property by means offalse and fraudulent pretenses, representations, and promises, for the purpose ofexecuting said scheme and artifice to defraud, did cause to be

. transmitted by means of wire communication certain writings, signs and signals, each such use of wire cOmn1unication being a separate count ofthis Indictment; all in violation of 18 U.S.C. § 1343 and 18 U.S.C. §§ 2(a) and 2(b)..

Count 18 18 U.S.c. § 1343 (Wire Fraud) .

29. The factual allegations of the Scheme and Artifice to Defraud are incorporated by

this reference as though fully set forth herein.

30. On or about September 21, 2007, in the Central Division of the District of Utah

and elsewhere, CLAUD R. KOERBER, defendant herein, having devised and intended to devise a scheme and artifice to ,defraud, and for obtaining money and property by means of false and

fraudulent pretenses, representations, and promises, for the purpose ofexecuting said scheme and artifice to defraud, did cause to be transmitted by means of wire communications by individual PB, certain writings, signs and signals, that is an interstate email from Utah to Hunter's Capital investors, including an investor in Florida, stating, among other things, "You have known all

along where. your money went and that Rick was using it to do real estate deals."; all in violation

of 18 U.S.C. § 1343 and 18 U.S.C. § 2(b).

Count 19 18 U.S.c. § 1957 (Money Laundering)

31. The allegations of the Scheme and Artifice to Defraud are incorporated by this reference as though fully set forth herein.

32. On or about June 7, 2006, in the Central Division of the District of Utah,

CLAUD R. KOERBER, Defendant herein, did knowingly engage and attempt to engage in a monetary transaction by, through, and to a financial institution, affecting interstate or foreign commerce, in criminally derived property of a value greater than $10,000, that is the purchase ofa 2001 Ferrari 550 Barchetta in the amount of$218,896.27, such property having been derived from a specified . unlawful activity, that is fraud in the sale ofsecurities in violation of15 U.S.C. §§ 77q and 77x; all in violation of 18 U.S.c. §§ 1957 and § 2(b)

Count 20 18 U.S.C. § 1957 (Money Laundering)

33. The allegations of the Scheme and Artifice to Defraud are incorporated by this reference as though fully set forth herein.

34. On or about June 7, 2006, in the Central Division of the District ofUmb,

CLAUD R. KOERBER, Defendant herein, did knowingly engage and attempt to engage in a monetary transaction by, through, and to a financial institution, affecting interstate or foreign commerce, in criminally derived property ofa value greater than $10,000, that is the purchase of a 2004 Ferrari 360 in the amount of $213,459.67, such property having been derived from a specified unlawful activity, thatisfraud inthesale ofsecuritiesinviolation of15U.S.C. §§ 77qand77x; all in violation of 18 U.S.C. §§ 1957 and § 2(b).

Count 21 12

26 U.S.C. § 7201 (Tax Evasion) .

35. The factual allegations ofthe Scheme and Artifice to Defraud are incorporated by this reference as though fully set forth herein.

36. During the year 2005,

CLAUD R KOERBER, Defendant herein, a resident ofthe State ofUtah, had and received a taxable income of in excess of $600,000; that upon said taxable income he owed to the United States of America income tax of in excess of$150,000; that he was required by law on or before October 15, 2006, to make an income tax return to the Internal Revenue Service, and to pay such income tax; that well knowing the foregoing facts, defendant KOERBER on or about October 15, 2006, in the District of Utah, did willfully and knowingly attempt to evade and defeat said income tax due and owing to the United States ofAmerica for the year 2005 by failing to make an income tax return to the Internal Revenue Service, by failing to pay said income tax to the Internal Revenue Service, and by causing various business entities under the control ofdefendant KOERBER to pay personal expenses on his behalf; all in violation of26 U.S.C. § 7201.

Count 22 26 U.S.C. § 7201 (Tax Evasion)

37. The factual allegations ofthe Scheme and Artifice to Defraud are incorporated by this reference as though fully set forth herein.

38. During the year 2006,

CLAUD R. KOERBER,

Defendantherein,a resident ofthe State ofUtah,hadandreceivedataxableincome ofin excess of $300,OOO~ that upon said taxable income he owed to the United States of America income tax ofin excess of $1 00,000; that he was required by law on or before April 16, 2007, to make an income tax return to the Internal Revenue Service, and to pay such income tax~ that well knowing the foregoing facts, Defendant KOERBER, on or about April 16,2007, in the District ofUtah, did willfully and knowingly attempt to evade and defeat said income tax due and owing to the United States of America for the year 2006 by failing to make an income tax return to the Internal Revenue Service, by failing to pay said income tax to the Internal Revenue Service, and by causing various business entities under the control ofDefendant KOERBER to pay personal expenses on his behalf; all in violation of26 U.S.C. § 7201.

A TRUE BILL:

FOREPERSON 0

BRETT L. TOLMAN United States Attorney

Assistant United States Attorneys