Federal judges turned back attempts to delay a trial for former real estate investment pitchman Rick Koerber who is alleged to have run a $100 million Ponzi scheme. And they won’t recuse themselves either.
The rulings in quick succession Thursday afternoon clear the way — barring further motion for delay — for Koerber’s trial to begin on Aug. 21 on 18 charges of securities and wire fraud, money laundering and tax evasion.
From 2004 to 2008, Koerber ran a series of entities grouped around his companies called Franklin Squires Cos. and Founders Capital, through which he taught a real estate investment strategy called “equity milling.” The companies took in about $100 million in investments by telling potential investors they could earn 2 percent to 5 percent per month.
Indictments allege that Koerber’s enterprise was not making money and that he had used about $50 million to repay other investors to make the operation appear profitable. He is also alleged to have used some to pay for personal expenses such as purchasing luxury cars.
Koerber last week added his former attorney, Marcus Mumford, to his defense team that includes Rebecca and Greg Skordas, who were appointed by the court.
On Friday, Mumford filed a motion to disqualify Shelby, U.S. Magistrate Judge Paul Warner and all federal judges in Utah as well as a motion to continue the trial.
Warner turned back the motion demanding his recusal, ruling it was untimely coming right before a final pretrial hearing. Warner also disputed allegations of bias related to remarks he made in a hearing and stemming from his former position as U.S. attorney for Utah.
Shelby also said Koerber’s request was untimely and he turned back arguments that he should recuse because he formerly worked at the law firm of Snow Christensen & Martineau, which advised Koerber during state and federal investigations into his companies and whose attorney could testify at the trial.
Shelby wrote that he didn’t work at the firm during the time it advised Koerber and that the jury would decide on the credibility of any testimony from its attorneys.
Shelby had previously said a federal judge from another state would hear Mumford’s motion to recuse all federal judges from the case. But on reviewing federal law and the motions, Shelby said he found they did not meet the threshold for further consideration and ruled that recusal of other judges would only become relevant if Shelby himself recused.
Notices were sent out Tuesday to more an 100 prospective jurors who are to report for questioning on Aug. 21 and Aug. 22.
