Rick Koerber Indictment

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I really wanted to post something as soon as I heard that Rick Koerber was indicted on mail fraud, wire fraud, and tax evasion, but I decided to wait and see if anybody would answer the burning question I had.  Granted, I didn’t read every article and comment out there but I didn’t see the answer I had.

Before I bring up my question let’s look at the charges.

Mail Fraud - It is a Federal crime or offense for anyone to use the United States mails in carrying out a scheme to defraud. In order to be proven guilty of mail fraud, it must be shown that the person knowingly and willfully devised a scheme to defraud, or for obtaining money or property by means of false pretenses, representations or promises and that such acts were carried out by means of use of the U.S. Postal Service. Obtaining a payment in response to a fraudulent offer or making a fraudulent offer through the mail is sufficient to claim an offense of mail fraud.

Wire Fraud - fraud committed using a means of electronic communication (as a telephone or computer)

Tax Evasion - the intentional and fraudulent underpayment or non-payment of taxes.

The two fraud counts must mean that he sent a letter and either an email or made a phone call to someone in an effort to defraud them.  They say he owes over $250,000 in taxes so that would cover the tax evasion.

If he raised $100 million and never made a profit, wouldn’t he have contacted more than just one investor through the mail, Internet, or telephone?  I was reading some other ponzi scheme charges against others and they seem to have multiple mail fraud and/or wire fraud counts so why does Rick only have one of each?

I don’t know the law very well, but I thought they could always charge you one count for each act.  When I first heard that he had one count of mail fraud and one count of wire fraud, but  allegedly raised $100 million in a ponzi scheme I couldn’t help laughing.  Was that the best they could come up with?  Twelve counts or 47 counts would sound more reasonable for the amount of money he raised.

Here is an article where the perpetrator was charged with three counts of wire fraud for raising $11 million.

It could be that since it was one business taking the funds that it is only one count, but I don’t know.

If somebody knows why there was only one count of each I would really appreciate a comment.

5 comments ↓

#1 Brian M on 08.06.09 at 12:53 am

Why was there only one count of each charge? That’s easy.

Because our government has become socialist, and under socialism there is no me, you, I, etc – There is only we and us – so there can only be one charge against society as a collective.

#2 Foo Foonley on 09.04.09 at 3:11 am

Fraud is often a very hard crime to prove. It sometimes comes down to proving motive. The accused can always try the stupidity defense. They claim that they are not crooks, they are incompetent businessmen. Koerber is claiming that he was undone by the popping of the housing bubble just like he claimed his previous “dot com” was brought down by the tech crash.

From what I know of the situation (and some of this may be wrong) the Koerber case is complicated by the fact that he sold unregistered securities in Wyoming and apparently learned how to make prosecution more difficult. He tried to insulate himself from the raising of money by setting up a multi-tiered fundraising system. He claims that no one invested money with him except for the top level organizations. The feds are claiming that the entire system is one large organization that was designed to funnel money to Founder’s Capital where it was used for purposes different than what was told to the bottom investors.

The reason why there may only be one count each is that the feds historically have an extremely high conviction rate. They like to have air tight cases, so they will typically choose the most egregious examples of criminal behavior, examples that can easily be understood by a jury.

The indictment, of course, does not give the evidence that will be used to prove the case, but it would not surprise me if the evidence will come from the early years of Founder’s Capital before Koerber got serious about holding the feeder funds at an arm’s distance.

If Koerber were smart then right now he would be trying to hammer out a deal with the feds and reduce his sentence by providing evidence about people like Gabe Joseph, Wade Sleater, members of his own fundraising system, etc. When the feds come calling on some of these guys, they won’t have a hard decision to make. They are not hardened criminals who won’t have a problem doing a stretch in prison. They are whitebread family men with wives and children. They will certainly point the finger at Koerber if it means not getting prosecuted themselves.

Instead he appears to be living in some sort of fantasy world where he is a martyr who is doing battle with evil socialists and moochers, much like the writings of the crackpot author he worships. The thing about martyrs is that by definition their stories do not end well, and going up against the feds with a public defender is a great way of ensuring that one meets that bad end.

#3 Jerry on 09.25.09 at 9:12 am

Foo, are you saying that he is using a public defender to defend himself?

#4 James C. on 10.07.09 at 5:14 pm

@Jerry,

He IS using a public defender. It was reported in the news soon after the indictment was issued.

Remember when Rick would go after those who took advantage of government assistance? Apparently he doesn’t either.

#5 Clark Snyder on 01.10.10 at 10:42 pm

19 more indictments levied in late 2009. Of course, Claude, you already knew that.

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