On May 29, Rick “The Free Capitalist” Koerber stood flanked by friends and supporters at a press conference to assert his innocence of federal charges of tax evasion, mail and wire fraud. The federal indictment that was filed May 27 alleged Koerber was the mastermind behind a $100 million Ponzi scheme that paid long-term investors with new investors’ money, while he spent millions of dollars on other business investments and purchased fancy cars. Koerber claimed the charges were “absurd” and “false,” and on June 19, he pleaded not guilty to all charges in U.S. District Court.
With his Free Capitalist army backing him up, Koerber is not going it alone in his legal battles. However, since word of the indictment first came down, a number of pals have tiptoed away from the Alpine businessman and his crusades against state regulators, including Rep. Carl Wimmer, R-Herriman, and Utah Attorney General Mark Shurtleff.
According to Koerber, Wimmer arranged a meeting in the spring of 2007 between Koerber and the state’s top lawyer. And, while Shurtleff has admitted to meeting with Koerber even while Koerber was the subject of a state securities investigation, Shurtleff says the meeting was harmless.
However, according to Koerber’s May 29 press release, Shurtleff openly criticized the very investigators looking into Koerber and the head of the Utah Department of Commerce.
In various recent media accounts, Rep. Wimmer characterizes his relationship with Koerber not as friends but as an elected official to a citizen. However, in speaking with City Weekly in July 2008, the words Wimmer used to describe his relationship with Koerber were: “A friend and an associate.”
Wimmer came to know Koerber when he enrolled as a student in Koerber’s American Founder’s University. Wimmer also has appeared on at least three occasions between 2007 and 2008 on Koerber’s “Free Capitalist” radio show, formerly aired on K-Talk 630 radio, from his studios in Provo. More recently, Wimmer was a speaker at the April 2009 Free Capitalist Conference, along with Paul Mero, director of the conservative think tank The Sutherland Institute.
In fall 2008, Wimmer was able to bank $450 worth of in-kind donations from Koerber in his re-election bid. Koerber called on his supporters through e-mail and Facebook to come out to a “Walk for Wimmer” event, in which Koerber treated volunteers to lunch at an Iceberg Drive-In—one of the franchises into which Koerber is alleged to have diverted investors’ money.
Wimmer helped Koerber when, as a lawmaker, he sponsored a 2007 audit of the Utah Division of Securities (UDS). According to the division, UDS was the same government agency investigating Koerber’s alleged Ponzi scheme before the case was handed over to federal investigators in late 2007.
“There is absolutely nothing that I did for Rick Koerber that I would not have done for any other citizen,” Wimmer writes via e-mail. “I am a representative. When people ask me to assist them, I am obliged to do so within the legal framework that is set up, and that’s what I did.”
Wimmer shares much the same opinion of the Department of Commerce and the Division of Securities as Koerber. In fact, after a spring 2008 legislative audit found procedural and personnel problems at the division, Wimmer told City Weekly he was considering legislation that would effectively remove the Utah Division of Securities from under the control of the Utah Department of Commerce and put it under the control of the attorney general’s office.
This would come as good news to Koerber. In his May 29 press release, Koerber expressed his gratitude to the attorney general for not bringing charges against Koerber in 2007, when state officials had first asked him to. Koerber thanked Shurtleff for being “more interested in the law than in retaliating against me for my political opinions and my criticism.”
Shurtleff has since stated the breakfast meeting he had with Koerber, which was arranged by Wimmer at Mimi’s Café in Draper, was harmless and had no bearing on his decision on whether or not to bring charges against Koerber. Despite repeated attempts to contact Shurtleff, his office would not return any call or comment to City Weekly for this story.
And when Wimmer was asked if the issue of the attorney general’s office taking over the Division of Securities was a topic of conversation during the breakfast meeting, Wimmer replied: “As best as I can recall, I do not believe the topic was ever discussed at this particular meeting.”
In Koerber’s May 29 press release, he says Shurtleff was comfortable in telling Koerber—who was still under investigation at the time—his opinions of former Securities Director Wayne Klein. Supervised by Francine Giani, Klein’s office was investigating Koerber. “Mr. Shurtleff told me that after Mr. Klein had worked for his office, he was certain that Ms. Giani did not have the qualifications to reign (sic) in someone like Mr. Klein who was known even in his past employment as chasing down personal vendettas,” reads Koerber’s press release.
This paraphrased quote is similar to one Koerber posted to his blog in January 2008, when the securities audit had begun. The language in this quote, however, is much harsher. Here Koerber anonymously cites “one of Klein’s former government employers” as saying “Mr. Klein is the worst kind of loose cannon” and that he can only do well when strongly supervised, and that “Francine [Giani] is not that capable.”
Despite similarities in the comments, when Koerber was asked if Mark Shurtleff, Klein’s former government employer, was the source of the 2008 blog quote, Koerber writes via e-mail: “No.”
Former Securities Director Wayne Klein couldn’t comment specifically about the statement, but he had concerns. “In general, I would hope that my attorney is not going to be criticizing me to somebody I’m investigating,” Klein says.