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House of Cards?

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


An episode of the Free Capitalist radio show returned from commercial break last August with music dramatic enough to bolster an epic battle scene from Braveheart. “Wow, that’s some great welcome-back music,” said show host Rick Koerber.

“I know; I feel like Luke Skywalker in Star Wars,” said co-host David Kirby, as Koerber slipped into an impression of dueling light sabers. The two men rolled along, Kirby laughing at Koerber’s antics. Then suddenly, like a switch had been flipped, Koerber soberly interjected: “Yes [but for us], this isn’t the music of victory. This is to announce the battle has begun.”

The Free Capitalist show broadcasts from a Provo studio and has been carried on KTKK (K-Talk) 630 AM radio for four years. During the duration of that run, Koerber has all but trademarked his own brand of capitalism as a cure-all for our politically troubled times. On the show, Koerber also has pitched his numerous other business interests, including his American Founders University. Koerber has taught thousands of students a process he calls “equity milling”—a real-estate investment strategy that, as some have practiced, has led to multistate securities-fraud charges against and investigations of more than a dozen Free Capitalist followers.

The fast-talking host’s radio rants bounce from pure dollars-and-cents business gab to apocalyptic diatribes about a socialist world takeover. In the course of a two-hour show, Koerber is as likely to reference Ronald Reagan and Ayn Rand as he is The Book of Mormon and the film The Matrix.

“Living in financial fear is like living in the matrix,” Koerber says. “I don’t live in the matrix, but I do visit there often to try and save people who were once like me.”

Last Aug. 31, Koerber, 35, brazenly challenged on the air the “commie-czars” of the Utah Securities Division. “They told me I couldn’t pay my investors!” Koerber shouted of his alleged encounter with securities investigators. Former Utah Securities Division director Wayne Klein would neither confirm nor deny for City Weekly that Koerber was or is under investigation.

“I’ll tell you why there’s more fraud in Utah than any other state in the union,” Koerber said on the show. “It’s because [investigators] go after people like Rick Koerber without facts!”

Koerber hasn’t been charged with any securities violations himself. But, if he is merely a real estate guru whose “13 Principles of Prosperity” have been lost on some wayward students now charged with securities fraud, it begs the question: What has this champion of capitalism done to keep followers from perverting his business philosophy? And, if business associates like recently charged Paul Bouchard—who is alleged to have bilked investors of $11 million meant to be paid from Koerber’s company—what has Koerber done to help make those investors whole again?

Helping prevent fraud and repair its consequences from within the industry is difficult, especially when you’re busy waging war on state regulators.

“I think you’re the wrongdoer,” Koerber continued on the radio show, invoking a rhetorical state regulator. “I think when you look in the mirror, you’re the evil you despise, because nobody in my circle is complaining.”

Even still, dozens of investors from connected companies have pleaded with Koerber for relief. And troubled investors have filed lawsuits in Utah and Colorado against Koerber and his companies.

Principle 5: People Are Assets
“Rick Koerber doesn’t care about anyone but Rick Koerber,” says Steve Skuba. Those are strong words for a man who never directly invested in Koerber’s Founders Capital LLC.

After 16 years as a beat cop in San Diego, Skuba moved to St. George in 2005 and started in real estate. Business acquaintances told him about a firm called SGS Capital. “I was very na├»ve about it,” Skuba says. “It was the first time I ever invested anything with anyone.”

Ultimately, Skuba pulled $200,000 equity from his home and invested it with SGS. Skuba says SGS representatives told him they would invest the money directly into Koerber’s Founders Capital. According to a Utah Securities Division order to show cause from October 2007, SGS allegedly gave the money to Hunters Capital, which then moved it to Founders.

At 3 percent monthly interest, Skuba was, for a time, earning $6,000 a month in interest payments. Koerber says he’s never taught people to use money from their own homes for investment. But, at the time, the risky move paid off for Skuba.

“It helped a lot to pay the mortgage, it really helped with my daughter,” Skuba says. His 19 year-old daughter was diagnosed at 18 months of age with a brain tumor on her left frontal lobe and has been gripped daily with violent seizures ever since. She requires constant care, Skuba says, and lives in a costly California school.

Skuba felt he had finally caught a lucky break—until Dec. 4, 2007. On that day, Paul Bouchard of Hunters Capital pleaded no contest to two second-degree felony charges filed by the Utah Attorney General’s Office, which charged him with taking $11 million from 140 investors.

According to a Utah Securities Division document on the case, SGS couldn’t pay back Skuba’s $200,000 investment because his money went from SGS to Hunters Capital. Hunters alleges the money had been invested with Koerber’s Founder’s Capital, though Koerber says he was unaware of how Hunters had raised its investments.

Koerber said that such indirect investments did not obligate him to compensate Skuba. Frustrated, Skuba says he never realized the money passed hands with Hunters Capital. He pleaded with Koerber to help him out.

“I didn’t want my credit to be ruined,” Skuba says, adding that he begged Koerber to buy his home so he could avoid foreclosure.

Koerber reluctantly agreed and last October began negotiating terms to purchase Skuba’s home. But Skuba says Koerber avoided finalizing the deal for several months. Finally, Koerber made Skuba an ultimatum: He would buy the house if Skuba signed a “hold harmless” agreement, waiving his rights to pursue legal action against Koerber.

Skuba signed—a costly mistake, he now says, as Koerber reneged on his promise to buy the home. Koerber disputes that; he told City Weekly the deal was only “recently finalized,” and that he would indeed buy the home. “We’ve got an excellent track record on the homes we buy,” Koerber says.

Ten minutes after City Weekly spoke with Koerber on Feb. 22, Skuba called the paper to say that, after spending months of trying to reach Koerber to complete the deal, Koerber had just phoned him to discuss the house purchase. Koerber also told Skuba he would investigate a legal option to buy the promissory note for the money SGS Capital owed Skuba.

Koerber then phoned City Weekly back to report that, after checking, he had discovered Skuba didn’t want to sell the house. Koerber said he had recorded the phone conversation as proof.

Skuba, dumbfounded that Koerber would record their conversation, alleges he didn’t want to sell the house under one option discussed, which would have kept him from recouping his remaining equity. Skuba worried he would still be vulnerable to foreclosure.

“[Skuba] gets pretty emotional,” Koerber responds. “I think that gets in the way of his judgment. But you know I’m just trying to help the guy out.”