Federal prosecutors want to come down hard on a Utah real estate magnate who bilked investors out of tens of millions of dollars in one of the state's largest Ponzi schemes.
Saying his crimes are emblematic of Utah's reputation as a hotbed for fraud, the U.S. Attorney's Office is recommending that Claud R. "Rick" Koerber spend 20 years behind bars.
"Like-minded potential fraudsters must be deterred through an expectation of just punishment should they follow Koerber’s footsteps," prosecutors wrote in a new court filing.
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Koerber, 46, used his businesses — Founders Capital, and related companies Franklin Squires Investments and Franklin Squires Cos. — as a $100 million Ponzi scheme from 2004 to 2008.
Koerber profusely proclaimed his innocence throughout the prolonged case. He has maintained that he defrauded no one but ran a profitable business and was singled out by bureaucrats angered by his radio show, "The Free Capitalist."
While investors believed their money would be used in secure real estate deals, Koerber spent it instead on luxury sports cars, like Spykers and Ferraris, producing a low-budget horror movie and minted his own "vanity" gold and sliver coins, according to prosecutors. Investors lost $45.2 million when the scheme collapsed.
Prosecutors say Koerber "preyed" on friends and fellow members of The Church of Jesus Christ of Latter-day Saints.
"Koerber was able to gain the trust of his investors, in part, because he appeared to be a faithful Mormon, and he used vocabulary and concepts designed to appeal to a Mormon audience," prosecutors wrote. "Koerber’s pitch of high but safe returns, combined with Mormon ideology, enabled him to obtain nearly $100 million from investors."
In his seminars, Koerber made overt references to the Latter-day Saint faith, often comparing himself to church founder Joseph Smith. Like the 13 statements Smith wrote about the church's core beliefs, Koerber created his own “13 Principles of Prosperity."
"He told his followers, in front of a pulpit similar to those in Mormon church houses, and in a tone familiar to any who have attended a Mormon testimony meeting, that 'I am telling you with all the soberness I can muster, though this is not a church pulpit, I know that what we are doing is being inspired by God,'" according to court documents.