LISTEN TO THE FULL AND UNEDITED PRESS CONFERENCE ANNOUNCING THE INDICTMENT OF RICK KOERBER of FRANKLIN SQUIRES and FOUNDERS CAPITAL WITHOUT ANY TYPE OF EDITING. THE CONFERENCE STARTS AT 2 MINUTES INTO THE RECORDING
Watch the Video That Rick Koerber wanted me to see that put everything that is happening into perspective. I simply stared in awe as I saw this!
In the years that I have been involved in the world of journalism, I have seen so many stories come and go. Most have a very short life in the memory of the Average American and sometimes, just sometimes, there is a story that not only captures the minds of the people in the State you live in, but the International Press.
Tonight at 11:22 PM, I received a call from Rick Koerber,the CEO and Chairman of Franklin Squires, Founders Capital and many other companies, who, as we reported on this site, has been indicted by a Grand Jury in Utah.
He wanted to meet TONIGHT!
Many people outside of the State of Utah do not know where to look for data on this case, so we are going to now post the official US Attorney Press Release that was submitted to the media yesterday, when the indictment was announced, as we have reported. Again, this is the press release that was issued to Western Capital Multimedia, as well as all other news outlets. Do not get bored, because there is much to follow!
For Immediate Release
May 26, 2009 United States Attorney's Office
District of Utah
Contact: (801) 524-5682
Indictment Charges Koerber with Mail, Wire Fraud and Tax Evasion in Connection with Real Estate Investment Scheme
Investment Scheme Took in About $100 Million in Investor Funds; More than $50 Million Used to Make Ponzi Payments While Other Investor Money Was Diverted to Other Uses
SALT LAKE CITY—A federal grand jury returned a three-count indictment Tuesday morning charging Claud R. Koerber aka Rick Koerber, age 36, of Alpine, with mail fraud, wire fraud, and tax evasion in connection with an alleged fraudulent investment scheme he devised to get money from investors. Koerber was involved with several businesses in Utah, including Founders Capital, Franklin Squires Investments, and Franklin Squires Companies, during the course of the scheme which the indictment alleges operated from sometime in 2004 to about Dec. 31, 2008.
The indictment alleges that in 2004, Koerber created and presented a series of seminars designed to encourage individuals to make money through a real estate program that he named the “Equity Mill.” The indictment alleges Koerber accepted money from individuals and companies through Founders Capital by means of representations that Founders Capital would use the money to make “hard money” or bridge loans to other entities associated with Founders Capital.
The indictment alleges Koerber used seminars, phone calls, mailings, radio programs, web sites and advertisements to communicate with investors and potential investors.
According to the indictment, Koerber represented to investors and potential investors that substantial amounts of money could be made through the “Equity Mill.” Koerber, according to the indictment, paid varying amounts of interest on the money provided to Founders Capital, but generally paid 5 percent per month to its first line investors.
Koerber, as a part of his seminars, encouraged first line investors “to act and think like a bank,” according to the indictment, by obtaining money from other people to place with Founders Capital. It was suggested that first line investors could pay 3 percent per month to second line investors, and in turn, second line investors, also thought to think and act like a bank, could pay 1 percent per month to third line investors.
Koerber represented to investors that Founders Capital provided an opportunity for families to loan their funds directly to Founders Capital in exchange for an aggressive interest payment and a high degree of liquidity. Founders Capital would then re-loan the money to parties that met Founders Capital’s lending criteria, Koerber said. The indictment alleges Koerber represented to investors and potential investors that the funds loaned to Founders Capital were secured by real property of greater or substantially similar value. The indictment alleges the money invested through the program would be used as “short term” financing to acquire and improve real property investments prior to obtaining more permanent cost effective financing.
The indictment alleges that Koerber told investors that when individuals or families make loans to Founders Capital, typical interest rates on the loaned funds would range between 1 and 10 percent a month, and that typical levels or security or collateralization ranged between 50 and 150 percent.
In fact, the indictment alleges, Koerber knew that those representations were false, or that Koerber made them false by using some of the money for purposes other than real estate bridge loans and to purchase real property. Furthermore, the indictment alleges, most of the money placed with Founders Capital was not secured or collateralized by real estate, and was diverted by Koerber for other purposes.
The indictment alleges Koerber used investor funds for personal housing, expensive automobiles, investments into restaurants, and investments into other businesses. For example, Koerber spent $850,000 on restaurants, loaned $800,000 to an associate for a restaurant, and spent more than $1 million on expensive automobiles. In addition, the indictment alleges, Koerber spent more than $5 million on making movies.
Koerber operated Founders Capital and other related entities as a ponzi scheme to convince earlier investors that their funds were earning money and to convince potential investors that the program was working and earning money. The ponzi payments created the false impression that the businesses were profitable, investments were safe, and interest was being paid.
At no time during the operation of the scheme, according to the indictment, did the Founders Capital or Franklin Squires entities operated by Koerber as a part of his Equity Mill scheme make a profit. Koeber obtained approximately $100 million in investor funds and over $50 million of those investor funds were used to make ponzi payments.
The number of victims involved in the alleged fraud scheme has not been determined, although it could be in the hundreds. Determining the number of victims is difficult because of the different tiers of investors involved. Authorities believe most victims live in Utah.
Count one of the indictment, mail fraud, charges Koerber with using the mail to send a letter addressed “To Our Lenders” which contained many of the false and fraudulent representations of the scheme. The potential penalty for one count of mail fraud is up to 20 years in federal prison and a fine of $250,000.
Count two of the indictment charges Koerber with transferring $1 million of investor money to a Founders Capital account. The potential penalty for wire fraud is up to 20 years in federal prison and a fine of $250,000.
Count three of the indictment, tax evasion, alleges Koerber had a taxable income of $900,000 for 2005 and owed federal tax in excess of $250,000 but failed to file an income tax return for the year. The indictment alleges Koerber caused various business entities under his control to pay personal expenses on his behalf. The potential maximum penalty for the tax count is up to five years and a fine of $250,000.
Defendants charged in indictments are presumed innocent unless or until proven guilty in court.
A summons will be issued to Koerber to appear for an initial appearance in federal court. The investigation, which is being conducted by the FBI, the IRS, and the Utah Department of Securities is continuing.
--- END OF PRESS RELEASE---
Now, back to tonight's call, Rick requested that we meet tonight starting at 11:00 PM, to "meet and have a discussion" This was great news to me, because Rick knows that I have been dealing with the Worldwide Media because of his case for the past two days non stop.
I jumped in my car, and headed over to Rick Koerber's home, and entered into what he referred to as the "Capitalist Bunker" . Rick had literally recreated the White House in his basement, complete with paintings, art, statues, leather couches and what I can only explain as a NASA looking computer system.
I was impressed.
"Rob, I want to personally thank you for all that you have done. I replied, that there was no reason to thank me, because all that I was doing was taking his case to the American and International Arena. And I TRULY BELIEVED IN THE Free Capitalist Cause, just like all of the dignitaries that we will be posting now and in the future.
"You know, a lot of reporters have called me since the announcement and almost every single one of them ask me the same question, "What did you say to Robert Paisola to make him change sides and to become so vocal about his support for you" they would ask, and he would simply say, "Why dont you call Robert Paisola and ask him yourself"
Well the answer is simple, he did nothing. We have talked for the past year and I documented and reviewed data for hundreds of hours. We (Myself and My Colleagues) came to the conclusion that the entire basis for the rumors of wrongdoing by Rick Koerber, could not be true, even from a mathematical standpoint, let alone the timeline, it just did not add up. We even had outside forensic accountants look at the raw data and former IRS officials review the details and they said the same thing! So, what in the hell was he being indicted for anyway?
We can not go into the exact details of the conversation, but I can tell you that the information that I was presented and given blew me away. Now I knew that I was on the right track. Thank god I decided to meet at this late hour with Rick Koerber.
"Rob, your coverage of this has caused this to become a worldwide matter" and I have been receiving calls from all over the world because of what you are saying. Nobody seems to want to believe that you and I see eye to eye, and People are asking me more about your coverage of this, than the case"
"I Smiled"
I know that Rick Koerber has some serious heavyweight champions on his legal team. And I also know that they have nothing to do with the political machine in Utah. For these are all former Federal Prosecutors, who now represent Mr. Koerber. I also saw the documents and listen to the inquiries of the many Utah Attorneys who now want to jump on the bandwagon because they now see that this is an International Case.
But the fact remains that we have spent over two years investigating this case, and our conclusion is very simple. The facts do not add up.
I pointed out that I was reading his website and that he was not saying anything at all about the case. He concurred and stated that he could not talk about the case and what he did say was confidential. But nothing was said. I also pointed out that I believe that the media coverage that has happened so far was somewhat fair, but I was absolutely positive that KUTV in Utah and Bryan, its anchor, were people that I trusted. He concurred and we discussed the fact that we previously had both agreed that it would be ok for Rick to meet with Fields Moseley of KUTV, as I had a strong belief in the fairness of the reporting of ABC and KUTV and I had personally met with the News Director on another matter last month.
So yesterday, Rick Koerber met with Fields Moseley and did a story for ABC News.
Here is the story:
"But Rick, why did you want to meet tonight? Because I want to hear the full unedited copy of the press conference that you recorded. "No problem, I will be right over"
We loaded the audio from the press conference that is now live at the top of this page. Rick listened in absolute disbelief. He said he had a video that he wanted me to see; a video that put this whole Federal Indictment into perspective. We watched the video ( Listed above) and I sat in awe, thinking, is this what our country has come to?
We met for three hours and agreed to meet tomorrow for another exclusive interview.
He discussed many issues and provided much insight into the past 48 hours into his life, but he was confident, upbeat, absolutely centered and clear on his mission to the American Public. I was sad that I could not say more, but hey, I can say whatever I want, I do not have to report to a board of directors. I own the company! That is why I created Western Capital Multimedia to begin with! If you have not seen the site, it is great, and we are very pleased. It is at www.WCMTalent.com
It is a passion and I love the media business, so why not own a piece of the pie! 3 magazines and a movie, and a TV Show in syndication is a great start. But this type of International Reporting makes every dime spent on studios, lighting, HD Cameras, and infrastructure worth it all. We have access like never before, all around the world. And that is what will make this case against Rick Koerber be seen around the world.
It was one meeting that I am glad that I chose to attend, regardless of the time of day.
I can PROMISE you that there is MUCH MUCH more to come. We will carefully be releasing data, recordings, writings, political statements, videos and much more, as the Attorneys allow this to go public. If you are a member of the press, a victim or someone who is watching this case, Watch us on Twitter and Facebook, because we do not have office hours and we will do WHATEVER IT TAKES TO GET YOU THE STORY! Even at 5:23 AM in the morning.
To Your Success
Robert Paisola
CEO and President
The Western Capital Group of Companies
The Robert Paisola Innocence Project
www.RobertPaisola.com
www.FranklinSquiresLawsuit.com
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