PROVO | 7 MARCH 2008 | Yesterday, an article published in the Salt Lake City Weekly incorrectly represented several facts related to Founders Capital and Founders Capital founding partner Mr. C. Rick Koerber. It is important to stress the added importance of accurate reporting when dealing with serious subjects such as financial and legal affairs. Regarding the legal matters discussed in the article, the merits, or lack of merits, will be decided by the courts. However, the way in which the Salt Lake City Weekly reported on FranklinSquires, Founders Capital and the activities of C. Rick Koerber was irresponsible.
It is the responsibility of a reporter to ensure as far as possible that parties to a story are given adequate opportunity to respond. In this case, Mr. Koerber provided many hours of interview and open access to company records to Salt Lake City Weekly reporter Eric Peterson who choose not to avail himself of the opportunity to either a) verify the facts related to his story or b) allow Mr. Koerber the courtesy to respond to any of the specific allegations contained in his article. Instead, Mr. Peterson deceptively represented that he was doing a “feature” on Mr. Koerber and asked no specific questions related to the allegations irresponsibly advanced in the article.
Mr. Peterson’s journalistic technique and the publishing of his story by the Salt Lake City Weekly without even the most basic fact checking procedure is outrageous and only further complicates a very important story related to real individuals in the Utah community. Spreading misinformation and rumor in the manner of this article actually hurts those most affected by the issues discussed.
There are too many factual errors in the story to address all of them in detail here, however, the following clarifications and corrections are offered to the public:
Related to Founders Capital:
- As of the present date none of the Founders Capital, LLC investors have filed any lawsuits against the company or its majority partner FranklinSquires Companies, LLC.
Related to Mr. Steve Skuba:
- Mr. Skuba is not now and never has been an investor or creditor of Founders Capital or any related entity.
- Mr. Skuba unilaterally decided not to go forward with the sale of his home to FranklinSquires subsidiary Hill Erickson, LLC, which transaction was originally made possible by Koerber at Mr. Skuba’s request following his call in to Mr. Koerber’s radio show on August 31, 2007.
- Mr. Skuba subsequently explained that it was his decision not to follow through with the transaction for his own personal financial reasons and a recording of his conversation with Mr. Koerber indicating as much was played for Mr. Peterson who neglected to accurately report the matter.
- Skuba has never spent “months” trying to reach Mr. Koerber or any of the employees of the companies involved. Mr. Skuba was in almost weekly contact with Mr. Koerber personally and his employees.
Related to Mr. Koerber
- Mr. Koerber founded FranklinSquires Companies, LLC with seven other partners in 2004.
- As a separate business venture Mr. Koerber helped organize the creation of Founders Capital, LLC with his partner Mr. Les McGuire in 2005. Mr. Koerber was the initial person responsible for the day to day affairs of Founders Capital and continues in that capacity today.
- Mr. Koerber began his real estate investing career (which is and has been unrelated to the business of Founders Capital) teaching people how to invest with no money and no credit. However, since that time his real estate classes now include subjects such as how to invest with money and credit.
- The term “Equity Milling” is the intellectual property of Mr. Koerber and while it is often misused in the marketplace Mr. Peterson was given a full description of the process and therefore has no reason to suggest that it involves such irreputable behavior as inflated appraisals or “straw buyers.” Equity milling, as taught by Mr. Koerber, is a method and strategy to profitably invest in real estate, minimizing and managing the related risks and capitalizing on the concept of “being the bank” when it is difficult to sell property. Students who follow this strategy have an increased ability to combat the present difficulties in the marketplace related to falling prices and difficult access to the secondary mortgage market.
- Neither Mr. Koerber nor any of his companies have ever offered a “year long real estate course for $7,500.” The most expensive course presently offered is $2,000.
Related to Mr. Bible
- Mr. George Bible never did business with FranklinSquires, Mr. Koerber or any of Mr. Koerber’s companies.
- Mr. Bible’s story and his related representations, as reported in the story, are almost entirely false fabrications.
- In late 2004, in the only encounter between Mr. Bible and Mr. Koerber, Mr. Bible did in fact walk away from the supposed transaction in question. The circumstances however are much different than what is reported. Mr. Bible did indeed walk away from a potential transaction after a meeting in Mr. Koerber’s personal office where it was pointed out that what Mr. Bible was in fact suggesting be done to facilitate his receiving a large commission on a transaction was highly questionable. After Mr. Koerber confronted Mr. Bible and Mr. Bible’s title attorney about the questionable nature of Mr. Bible’s suggestion, Mr. Bible in a rash action defamed Mr. Koerber and FranklinSquires to many real estate professionals and unilaterally ceased any attempt to rectify his contractual obligations. No business ever ensured between the two parties and Mr. Bible has no first hand knowledge of any transaction actually done or completed by Mr. Koerber or FranklinSquires. It is important to note that the journalist offers no factual verification for any of the details contained in Mr. Bible’s sensational story.
- Mr. Bible’s insinuation that Mr. Koerber or FranklinSquires has ever engaged in practices such as shopping for “14 different appraisals” and choosing values that were “more than double” the market value of homes is slanderous and ludicrous. The transactions of Mr. Koerber and his companies have been regularly scrutinized and there has never been an attempt by Koerber or his associates to “artificially” inflate values as implied in the article.
- Mr. Koerber and his companies use independent 3rd party appraisers and never require other participants in a transaction to rely solely upon any specific appraisal or appraiser as a condition of any transaction. The journalist, Mr. Peterson, was also made aware of these facts and was personally invited by Mr. Koerber to review any company records to verify these facts.
- Mr. Koerber and his programs do not involve “straw buyers” as suggested in the article.
Founders Capital and FranklinSquires consider Mr. Peterson’s article full of inaccuracies such as those corrected or clarified above. Among the many other items either deliberately misstated by Mr. Peterson or simply reported without the generally acceptable journalistic standards, the following corrections are important to clarify:
- Rachelle Taylor was never an accountant for FranklinSquires. Mrs. Taylor was a human resources employee who assisted with bookkeeping until December 2007. Mrs. Taylor’s decision to invest with Hunters Capital was unrelated to her position with FranklinSquires and was done without the knowledge of any FranklinSquires executive. Her decision to do so complicated her professionalism and was only discovered by company management after problems began between Hunters and Mrs. Taylor. The charges made against Mrs. Taylor by the Utah Division of Securities were launched after Mrs. Taylor’s employment with FranklinSquires ended and have nothing whatsoever to do with the business of FranklinSquires or Founders Capital.
- Free Capitalist Radio producer Israel Curtis has since been cleared of the false charges filed by the Utah Division of Securities. Mr. Peterson neglects to reference that Mr. Wayne Klein, the former Division of Securities Director making these charges recently resigned amid controversy related to his reportedly over aggressive prosecution and “misuse of authority.”
- Gabriel Joseph was never an executive officer, employee or “right hand man” with Founders Capital. Gabriel is one of eight current partners in FranklinSquires. Gabe’s company Annuit Coeptis, LLC is an entirely independent company that has no common ownership, management or employees related to FranklinSquires or Koerber.
- There are no controversial transactions involving Koerber, Founders, or FranklinSquires as implied by Peterson in his article. All of the actual transactions referenced by Peterson or with unrelated companies. The representation by the Salt Lake City Weekly that there are such transactions without providing any reference to any facts only contributes irresponsibly to the rumors and false perceptions in the marketplace. This is not appropriate conduct by professional journalists and FranklinSquires encourages Salt Lake City Weekly and other media outlets to encourage the highest standards of professional reporting from their journalists.
- The representation of Vonco as a Founders Capital investor is inaccurate. Vonco is not a Founders Capital investor and Mr. Peterson was clearly explained as much and did not ask for clarification or response to this untrue allegation during his multiple interviews with Mr. Koerber.
- Vonco’s lawyers not only received a response from FranklinSquires and Founders Capital but it was made clear that Vonco’s lawsuit against Founders and Mr .Koerber was unfounded, full of legal problems, factual inaccuracies and outright fabrications.
- Neither FranklinSquires nor Founders Capital has been shut down. FranklinSquires elected to cease operating out of the Eastbay location as part of its efforts to downsize and refocus resources on ensuring the company survives and satisfies all its debts and obligations. This decision is in no way directly related to Founders Capital, nor does it affect the operations of Founders Capital.
If the Salt Lake City Weekly would have asked for a response from Mr. Koerber or the companies on the several allegations advanced in his story, it would have allowed many of these inaccuracies to be corrected in advance. Instead Mr. Peterson’s article simply contributes to the unfortunate volume of rumor and gossip (most of which is unfounded) in the present marketplace, none of which helps the innocent and honest citizens of Utah.
FranklinSquires and Mr. Koerber are happy to respond to serious inquiries from interested persons related to matters having to do with the subject of this article. The best method for obtaining information is to send written request via email using the companies “Contact Us” webpage.