Koerber Charged with Fraud, Wire Fraud, Money Laundering, and Tax Evasion, Utah 2018

Claud R. Koerber, also known as Rick Koerber, has been charged with violating federal law in connection with an alleged fraudulent investment scheme. The 43-year-old faces four 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.

On Wednesday, a federal grand jury returned an 18-count indictment against Koerber, who is accused of using the United States mails, interstate wire transmissions, and interstate commerce to execute the scheme. The indictment alleges that Koerber used investors’ money for purposes not disclosed to many investors or potential investors, such as for Koerber’s personal housing, other personal expenses, expensive automobiles, investments into restaurants, and unsecured loans to other businesses and entities.

The indictment alleges that Koerber operated the businesses of Founders Capital and related entities as a ‘Ponzi scheme.’ According to the indictment, Koerber used money placed with Founders Capital to make interest payments to earlier investors to create the false impression that the businesses were profitable, that investments were safe, secure, and that interest was being paid. The indictment alleges that at no time during the operation of the investment scheme did Founders Capital or Franklin Squires entities operated by Koerber make a yearly profit.

Koerber, by means of his misrepresentations and omissions, obtained approximately $100 million in investor funds, the indictment alleges. More than $50 million of the investor funds were used to make Ponzi payments to other investors. When Founders Capital stopped making payments to investors in 2007, investors lost approximately $47 million, according to the indictment.

A summons will be issued to Koerber to appear on the charges. The potential maximum penalty for each count of fraud in the offer and sale of securities is five years. Each wire fraud count carries a potential penalty of 20 years. The money laundering counts, which allege Koerber used criminally derived money to purchase expensive cars in excess of $200,000 each, carry potential 10-year sentences. The two tax evasion counts have potential penalties of five years.

U.S. Attorney John W. Huber stated, ‘In reinitiating this prosecution, the United States brings a case that the community deserves to have determined on its merits. Our intent is to press this matter to such a resolution. We seek a speedy public trial, without undue delay, where a jury of his peers can fairly assess the evidence against the defendant.’

Koerber will face a federal trial on the charges. The case against Koerber is currently ongoing, and it is unclear when a trial date will be set.

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