Posts Tagged Money laundering
This article was in Monday’s Salt Lake Tribune regarding Rick Koerber, who defrauded entry-level real estate investors out of $100 million plus using the Ponzi scheme referenced in this post. Here is the contents of the article since the Tribune will soon archive it:
Koerber seeks to keep key documents out of trial
Court » Accused swindler contends information was confidential and given to the government by mistake.Updated: 05/03/2010 07:23:51 PM MDT
Rick Koerber took the witnesses stand Monday in an effort to prevent the government from using documents against him in connection with federal charges that he operated a Ponzi scheme out of Utah County that took in at least $100 million.
Koerber’s testimony at a court hearing was part of a legal confrontation over a document that is the basis for one of 22 charges against him that include fraud, money laundering and tax evasion. It also pitted Koerber against a former personal assistant described as a key witness who provided FBI agents with information from Koerber’s FranklinSquires Cos. based in Utah County.
Koerber was indicted in May 2009 by a federal grand jury. Under the guise of a real estate investment company, Koerber’s Ponzi scheme, the charges say, promised returns of around 5 percent a month.
But, according to the indictment, the companies never made a profit and instead he used more than half of the $100 million to pay initial investors with money from new investors. In addition, Koerber allegedly diverted monies for personal use, including more than $1 million to purchase autos such as a 2001 Ferrai 550 and a 2004 Ferrari 360 for more than $200,000 apiece.
No trial date has been set, but Koerber and attorney Marcus Mumford are contesting the government’s right to hold and use 222 pages that they say were provided by mistake out of the 200,000 pages of documents given the government in response to subpoenas. Those include correspondence with attorneys over various matters
But the one document that took up the most time Monday during a four-hour hearing was one meant for people who had invested in or loaned money to FranklinSquires. The 2005 letter addressed “To our Lenders” is the basis for a mail fraud charge that alleges the document contained “false” information.
The question concerning it and the other documents Koerber wants returned is whether they are confidential because they were part of an attorney-client relationship.
Koerber testified that a draft of the letter was among his correspondence with attorney Ross Moore and was not actually sent to the company’s lenders. Attorney-client documents that are disclosed to outside parties generally are not protected.
Koerber’s testimony was at odds with that of FBI agent Cameron Saxey, who said the agency obtained the letter through two sources — the documents provided by Koerber and from a former assistant to Koerber, Rachelle Taylor.
Saxey said that the letter was on a CD of documents that Taylor provided to the FBI from her employment with Koerber that included work in the company’s financial department. Saxey said she told him she mailed the letters to people who had invested or loaned money to the companies.
“She said she sent it out,” said Saxey, although the agent said the FBI had not uncovered any other evidence to corroborate whether the letter was actually mailed.
The issue could be important because Mumford said that Taylor, “one of the government’s key witnesses in this case,” is disgruntled because she sued Koerber for employment discrimination after being dismissed.
FranklinSquires’ former attorney, Russell Skousen, testified that the documents in question were inadvertently given to the government. Skousen went to work for Koerber after he resigned as head of the state Department of Commerce, which had begun making inquiries about Koerber’s operations.
Veteran criminal defense attorney Max Wheeler also said such documents were supposed to be retained by FranklinSquires under a subpoena from the Internal Revenue Service to which he had been hired to respond.
Read the original article here.
U.S. Magistrate Sam Alba took the issues under advisement and said he would rule soon.
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