Utah Man Re-Indicted for $100 Million Ponzi Scheme

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Koerber  Photo: Daily Herald file

 

In 2014, 18 federal charges against Utah-based, the self-proclaimed “free capitalist,” were dismissed. Prosecutors alleged that Koerber was behind a $100 million Ponzi scheme.

At the time, the judge overseeing the case cited “questionable ethical conduct” and a “pattern of neglect” by prosecutors handling the case which caused multiple delays. The judge said these delays violated the Speedy Trial Act.

Now, two years later, a new federal grand jury has again indicted Koerber on 18 charges: 10 counts of wire fraud, four counts of fraud in the offer of sales and securities, two counts of money laundering, and two counts of tax evasion.

According to the indictments, Koerber ran several business entities, including teaching a real estate investment strategy he referred to as equity milling.

He attracted investors by promising them a return on their investment of between two to five percent each month. He allegedly ran the scheme from 2004 until December 2008 and collected approximately $100 million from investors.

Prosecutors allege that half of those funds – $50 million – was used to pay back other investors in order to give the appearance that his equity milling plan was a success.

Records show that the operation never showed a profit, however, in 2005, investors were told the businesses earned $111 million in revenues and in 2006, $500 million in revenue. When the operation finally collapsed, investors were owed approximately $47 million.

Koerber is accused of using investors’ funds for personal expenses. Some of these expenses include $5 million to finance a film, $1 million on luxury vehicles, $850,000 to purchase restaurants, and $425,000 to mint coins. Other personal expenditures Koerber spent investor money on was for dental work and adoptions.

The new indictments come after prosecutors brought the case before the 10th Circuit Court of Appeals. The appeals court sent the case back to the lower court for review. The original judge, who dismissed the case two years earlier, then withdrew from the case.

In August, the new judge ruled that although the original charges had been dismissed, prosecutors could refile. She also ruled that many of the delays cited by the original judge were actually caused by the defendant.

Original indictments against Koerber were filed in May 2009. At that time, there were only three charges, but six months later, a second indictment was added with 19 additional counts.

The original judge dismissed what prosecutors called a key piece of evidence in these two indictments, which led to a third indictment being handed down. That third indictment was the one the judge dismissed in 2014.

According to the U.S. Attorney’s Office, a summons will be issued requiring Koerber to appear in court. The 10 wire fraud charges carry a potential penalty of up to 20 years for each count.

The four sales and security sales fraud charges each carry a potential penalty of five years apiece. The two money laundering charges carry a potential penalty of up to 10 years each.

This is a sponsored post written by Nicholas Braswell, a former public defender now in private practice as a criminal and DUI defense attorney with Price Benowitz, LLP  in Richmond, VA.  Price Benowitz contributes sponsored content on local and national news related to the law.



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