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Home / Articles / News / Cover Story /  House of Cards? Page 5
Cover Story

House of Cards? Page 5

Anxious investors fear “Free Capitalist” Rick Koerber’s real estate investment empire is folding

By Eric S. Peterson
Posted // March 5,2008 - Not Everyone is Buying It
On Feb. 18, Marietta and Dennis Baca filed suit in Denver against Koerber and Joseph, claiming the men pulled them into a scheme that has taken all their assets—a modest retirement, Social Security and a small pension Marietta earned after working at a Safeway store for 22 years.

Marietta, 63, and Dennis, 62, live in Aurora, a Denver suburb. “They’re a real nice couple,” says Miles Gersh, the Bacas’ Denver attorney. According to the lawsuit, Koerber and Joseph pitched a lavish lifestyle to the Bacas, persuading them to take $170,000 from home equity. Marietta also put her 401(k) earnings and costly credit-card advances into Founders, according to the suit.

“It’s a scheme,” alleges Gersh. “A lot of things represented were false, and many things that were true were omitted.”

As in the Idaho case, Gersh says Annuit Coeptis passed investments from the Bacas to Founders Capital, for fat interest payments. “The defendants were engaged in a wide-ranging Ponzi scheme in which defendants induced students of their real-estate instruction programs to use their home equity to invest in [promissory] “notes,” then used funds provided by investors in the notes to pay the interest or principal of the notes sold to earlier investors,” the lawsuit alleges.

While the suit claims that a member of Annuit Coeptis convinced the Bacas to invest, the suit describes Koerber as a “control” person. “It’s for individuals who are effectively in charge of management positions,” Gersh says. “[Koerber] might not have a formal position in the company that our clients invested with, but we don’t think that’s accidental.”

Now You See Them, Now You Don’t …
As of Feb. 11, Koerber had radically downsized FranklinSquires. Amid controversial transactions and alleged meddling in his affairs by state securities, Koerber writes on the FranklinSquires Website:

“I would rather wind up the affairs of FranklinSquires, New Castle and Hill Erickson, pay all our creditors—and refocus my energy and the energy of those who are interested in working with me on something where we can make a more powerful difference in the world.”

Last November, Koerber says, he circulated a letter offering a unique financial opportunity. After Founders Capital had been delinquent on interest payments, Koerber’s lawyers offered major creditors the opportunity to convert the debt Founders Capital owed them into company equity. “We offered everyone the option to swap for equity or get all of their principal back plus 12 percent interest,” Koerber says. “No one opted to take the principal back.”

But at least one company wanted its money back rather than “equity.” Koerber offered Vonco, a Utah County real-estate investment firm, that invitation. His companies owed Vonco $3 million.

The offer to exchange debt for a stake in a company that couldn’t pay its investors raised a red flag, says Vonco’s attorney Reid Lambert.

On Feb. 8, Vonco filed suit in Utah County 4th District Court against Koerber’s companies, seeking a lien on one of Koerber’s properties as compensation for delinquent interest payments. While they were interested in getting their principal back, the amount owed to them by Koerber’s companies was far greater than just the offered principal plus 12 percent interest. Vonco’s lawyers tried to contact FranklinSquires but received no response.

The following week, FranklinSquires had stripped down its operations. “There was never any disclosure they planned to shut down the company,” Lambert says.

Anxious investors are asking how Koerber, in the middle of drastic downsizing and legal trouble, will carry on.

While you may not be able to catch Koerber on K-Talk (he’s moved to Provo station KHQN 1480), it’s not too late to turn your brain on, according to the Free Capitalist Website. Koerber recently advertised a “unique” one-day, $1,000 seminar on Feb. 27, offering to teach the “almost ancient product” of creating wealth—through life insurance.

You, too, can discover “how life insurance can be the most powerful tool to generate substantial wealth quickly”—and if you’re not completely satisfied, every penny will be returned to you, guaranteed.

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REPLY TO THIS COMMENT
Posted // September 21,2011 at 13:31 When Koerber lived in Casper WY he became known to the community as a liar, a cheat, and a thief. That was some time back. Has he changed his ways?

 

REPLY TO THIS COMMENT
Posted // June 21,2009 at 16:36

 

REPLY TO THIS COMMENT
Posted // June 3,2008 at 10:09 I can’t believe that A Little Bit Suprised could possibly think that people would think he’s being honest. Should have been signed Kool- Aid drinker. Wow.

 

REPLY TO THIS COMMENT
Posted // March 29,2008 at 20:35 you all suck quit being babies and just realize 25% APY is low and I can get You 76% APY just live the principals!

 

REPLY TO THIS COMMENT
Posted // March 20,2008 at 13:37 Hey P-DCR,nnYou sound just like one of those Koerber boys, bunch of wannabes with no real formal education but think that they’ve stumbled on the Secret of the Money Tree that us normal successful consumers that made our money the honest way using the true principles instilled on us by the Founding Fathers which involves HARD WORK and SACRIFICE did not. Let us all see how long can you keep up with your Ferraris, Million Dollar homes which don’t even belong to you but the folks whose life savings from years of back breaking labor you’ve fleeced! What now?- You’ve run out of credit partners, straw buyers, greedy investors, no more free money from the banks you’ve robbed and you’re starting an insurance scam!! Quit already!! Your arrogance will consume you !! Admit that you’ve made a terrible mistake and don’t drag more people into the oblivion with you. You are probably a member of the church yourself so your family members probably also own a PRIUS. There’s nothing wrong with that, remember the Word of Wisdom? Be prudent with your finances and live well below your means. The Koerber boys always preached The Book of Mormon this and Founding Fathers that, yet you boys trampled all over your own words and ’philosophy’. 13 Principles of Wealth = Hypocrisy + David Koresh like BS. And yes, I know Koerber and Gabriel personally. They are indeed HIDING from me. Where are my $225K? Been waiting since 03/07. And don’t post another one of your slapping your own face rebuttal like the one in your website. It’s just goes to show what con artists you really are. You know who I am and what my phone number is.

 

 
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