Judge gives Rick Koerber a chance to argue for lighter prison sentence in prolonged fraud case

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SALT LAKE CITY — A Utah real estate investor convicted of running a multimillion dollar Ponzi scheme will get the chance to argue for a lighter sentence than the 20 years prosecutors want him to spend in federal prison.

Claud R. "Rick" Koerber was scheduled to learn his fate Monday, but his attorneys asked the court earlier to consider holding an evidentiary hearing. Koerber is disputing the number of victims and their financial losses the government used to come up with its sentence recommendation.

U.S. Magistrate Judge Paul Warner agreed Monday to hold a two-day hearing June 17-18, but made it clear he won't let the case drag on.

“We’re not going to retry the case," he said. "We are not delaying this for months. "That's not going to happen."

After nearly a decade of court battles including a dismissal and a mistrial, a jury last September found Koerber guilty of 15 counts of wire fraud, fraud in the offer and sale of securities, and money laundering. He likely now won't be sentenced until this September when the judge who oversees he case is available.


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. Prosecutors say an estimated 600 "indirect" investors lost a total of $45.2 million.

Government prosecutors say based on those numbers, Koerber should spend 20 years behind bars under federal sentencing guidelines.

Kathryn Nester, Koerber's federal public defender, argued in court papers that the government overstated the seriousness of the offenses, and exaggerated the number of victims and their losses.

Government prosecutors offered Monday to set the number of victims at 38 "front line" investors — those who gave money directly to Koerber — for sentencing purposes. Nester said she is considering the offer.

Koerber wants the hearing to show the losses were less than half the amount, and that alone would reduce the sentencing range to no more than 21 to 27 months.

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Dennis Romboy
Dennis Romboy is an editor and reporter for the Deseret News. He has covered a variety of beats over the years, including state and local government, social issues and courts. A Utah native, Romboy earned a degree in journalism from the University of Utah. He enjoys cycling, snowboarding and running.


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