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Judge throws out case against Rick Koerber Robert Paisola Reports

August 15, 2014 11:08 am  •  

A federal judge has tossed out all the charges against former Utah County real estate mogul Rick Koerber, ruling the government has failed to meet the qualifications to give Koerber a speedy trial. 
Federal Judge Clark Waddoups issued a 17-page decision Thursday that found prosecutors had violated the Speedy Trial Act and that he had no other choice but to dismiss the case. Waddoups dismissed the case with prejudice, meaning Koerber cannot face the same charges at a later date. 
"Because the STA has been violated, the case must be dismissed," Waddoups wrote. 
Waddoups noted in the ruling the allegations against Koerber were "serious," but he said the prosecution had "actual problematic conduct" in pursuing the case and said that factor was key in his decision to not allow the government to further pursue these particular charges against Koerber. 
"[T]he Government's pattern of neglect and dilatory conduct in managing the STA clock, but also several instances of questionable ethical conduct in prosecuting this case -- weigh in favor of dismissal with prejudice," read the dismissal. 
Koerber was originally charged in 2009, accused of duping hundreds of Utah investors into pumping millions of dollars into bogus real estate investments. 
Koerber's company, FranklinSquires, was based out of Provo, but closed its doors after an investigation by the state Division of Securities accused him of scamming investors in a $100-million Ponzi scheme and using the funds to pay for luxury vehicles, restaurant investments and to make movies.
According to Daily Herald reports on Koerber's 2009 indictment, he would, through his so-called real estate program called Equity Mill, lure investors with offers of "an aggressive interest payment and a high degree of liquidity" for loans they made to the company. He claimed investors would be paid "interest rates ranging between 1 percent and 10 percent a month."
As part of his program, Koerber encouraged first-line investors, who generally received 5 percent per month, to obtain funds from other people to place with Founders Capital. These first-line investors would then pay 3 percent per month to second-line investors, who in turn, would pay one percent per month to third-line investors.
Koerber claimed the investors' funds would be used to make bridge loans to Founders' subsidiaries, New Castle Holdings and Hill Erickson, supposedly for real estate purchases. He also claimed the investors' funds were "backed, collateralized or secured by real property of greater or substantially similar value" and that "typical levels of security or collateralization range between 50 percent and 150 percent."
"The Ponzi payments created the false impression that the businesses were profitable, investments were safe, and interest was being paid," said the indictment.
At the time of the charges Koerber said he was disappointed the government decided to seek the indictment, and that it was full of inaccuracies and misconstrued the operation of his businesses.
Koerber's attorneys did not immediately respond Friday to the Daily Herald's request for comment on the dismissal of the case. 
Waddoups informed both the defense and the prosecution in June he would dismiss the case because of the violation of the Speedy Trial Act. At that time he said he needed to determine if the dismissal should be with or without prejudice. Thursday's ruling finalized his decision. 

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