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Case 2:09-cr-00302-CW Document 220 Filed 02/01/12 Page 1 of 7

MARCUS R. MUMFORD (Utah Bar No. 12737) Mumford West & Snow LLC 15 West South Temple, Ste. 1000 Salt Lake City, UT 84101 Tel: (801) 657-4390 Fax: (801) 657-4393 Email: mrm@mumfordwest.com Attorney for Defendant IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION United States of America, Plaintiff, v. Claud R. Koerber, a/k/a Rick Koerber, Defendant. Case No. 2:09-cr-302-CW MOTION TO DISMISS CERTAIN COUNTS OF THE SECOND SUPERSEDING INDICTMENT FOR VIOLATIONS OF 18 U.S.C. 3282(A) (STATUTE OF LIMITATIONS) Judge Clark Waddoups Magistrate Judge Samuel Alba PLEASE TAKE NOTICE THAT, pursuant to the 18 U.S.C. 3282(a), Federal Rules of Criminal Procedure 12, and other applicable authority set forth herein, Defendant moves this Court to dismiss counts 1, 2, 4, 5, 7, 8, 9, 10, 11, 12, 17, and 18 of the Second Superseding Indictment because the acts allegedly taken by Defendant to support these counts fall outside the applicable five-year limitations period and are therefore time barred. This motion is based on the attached Memorandum of Points and Authorities, the records and pleadings on file with the Court, all matters of which the Court may take judicial notice, and such other evidence and oral argument that may be presented at any hearing on this Motion. Defendant hereby requests oral argument on this Motion. DATED: January 31, 2012 /s/ Marcus R. Mumford Attorney for Defendant

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MARCUS R. MUMFORD (Utah Bar No. 12737) Mumford West & Snow LLC 15 West South Temple, Ste. 1000 Salt Lake City, UT 84101 Tel: (801) 657-4390 Fax: (801) 657-4393 Email: mrm@mumfordwest.com Attorney for Defendant IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH, CENTRAL DIVISION United States of America, Plaintiff, v. Claud R. Koerber, a/k/a Rick Koerber, Defendant. Case No. 2:09-cr-302-CW MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF DEFENDANTS MOTION TO DISMISS CERTAIN COUNTS OF THE SECOND SUPERSEDING INDICTMENT FOR VIOLATIONS OF 18 U.S.C. 3282(a) (STATUTE OF LIMITATIONS) Judge Clark Waddoups Magistrate Judge Samuel Alba INTRODUCTION As this Court has previously observed: a criminal statute of limitations must be liberally interpreted in favor of repose. United States v. Brody, 621 F. Supp. 2d 1196, 1198 (D. Utah 2009) (Waddoups, J.) (quoting United States v. Reitmeyer, 356 F.3d 1313, 1317 (10th Cir. 2004)). Here, there are at least twelve counts of the second superseding indictment that are based on acts beyond the applicable limitations period and therefore time barred. ARGUMENT I. Any Count In The Second Superseding Indictment Based On An Act Prior To September 29, 2006, Is Barred By The Applicable 5-Year Statute Of Limitations. Federal law provides that, no person shall be prosecuted, tried, or punished for any offense, not capital, unless the indictment is found or the information is instituted within five years next after such offense shall have been committed. 18 U.S.C. 3282(a). The Tenth

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Circuit has applied this five-year limitations period, inter alia, to counts of mail fraud, wire fraud, securities fraud, and money laundering. United States v. Flood, 635 F.3d 1255, 1258 (10th Cir. 2011); Beasley v. United States, 327 F.2d 566, 566-67 (10th Cir. 1964); Brody, 621 F. Supp. 2d at 1198. Limitations periods begin to run when the alleged crime is committed, i.e., the date of the alleged transactions or, in the case of securities fraud, the date of the alleged offer or sale of a security. Reitmeyer, 356 F.3d at 1317; see also Fournier v. United States, 58 F.2d 3, 6 (7th Cir. 1932) (The date of the mailing of the letters starts the running of the statue of limitations.); United States v. Read, 658 F.2d 1225, 1240 (7th Cir. 1981) (The statute of limitations begins to run from the date of the mailings or stock sales.). According to counts 1, 2, 4 and 5 of the second superseding indictment, Defendant is alleged to have committed fraud in the offer or sale of securities on March 6, 2006, via what the government terms an Internet Advertisement of Real Estate Seminar; in the summer of 2006, via an Advertisement to Safely Earn 1-5% per Month on Your Cash in Creative Real Estate Magazine; and on November 4, 2005, and July 6, 2006, via alleged Wire Transfer[s]. (Second Superseding Indictment [Docket #191] at 8.) According to counts 7-12 of the second superseding indictment, Defendant is alleged to have committed wire fraud based on transactions occurring between November 8, 2005, and September 13, 2006. (Id. at 9.) And in counts 17 and 18, Defendant is alleged to have committed two counts of money laundering for purchasing automobiles on or about June 7, 2006. (Id. at 10-11.) On the face of the indictment, all of these alleged offenses took place more than five years prior to September 29, 2011, and the counts are therefore time barred. See 18 U.S.C. 3282(a) ([N]o person shall be prosecuted, tried or punished for any offense unless the

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indictment is found within five years next after such offense shall have been committed.); Reitmeyer, 356 F.3d at 1319 (affirming the dismissal of an indictment brought several years after the execution of the alleged scheme to defraud); Brody, 621 F. Supp. 2d at 1198 (dismissing counts for money laundering brought more than five years after the dates of the alleged transactions). II. There Is No Tolling Based On The First Two Indictments. While some cases hold that a superseding indictment filed while the first indictment is validly pending is not barred by the statute of limitations unless it broadens or substantially amends the charges in the first indictment, United States v. Davis, 953 F.2d 1482, 1491 (10th Cir. 1992), that rule is inapplicable here because, among other things, the government has acknowledged that the first two indictments were invalid as a result of the governments substantial reliance on Defendants privileged information. (See Def. Mot. [Docket #202] at 2 & n.2, which motion is incorporated herein by reference); (Govt Opp. [Docket #206] at 5.) In fact, the first superseding indictment, which broadened and substantially amended the original indictment was filed on November 10, 2009, after [Defendant] asserted privilege, further grounds supporting its invalidity. (See June 2, 2011 Order at 12 (ruling that after [Defendant] asserted privilege [on October 31, 2009], the government could not ethically use the relevant documents until a court determined otherwise).) The invalidity of the first two indictments in this case is significant because a defective original indictment is simply a nullity [and] clearly cannot serve to block the door of limitations as it swings close. United States v. Crysopt, 781 F. Supp. 375, 378 (D. Md. 1991). [W]hile a superseding indictment ordinarily relates back to a pending indictment for limitations purposes, a superseding indictment only relates back to a pending valid indictment. United States v. Ratti, 365 F. Supp. 2d 649, 667 (D. Md. 2005); accord, United States v. Gillespie, 666 3

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F. Supp. 1137, 1140 (N.D.Ill. 1987) (holding that an invalid indictment does not toll limitations). Ratti presents analogous circumstances to those at issue in this matter. In that case, the government had presented to the grand jury and based its indictment, in contravention of Calandra, on a document containing statements of the defendant that were privileged pursuant to a proffer agreement. See Ratti, 365 F. Supp. 2d at 667. The court rejected the governments arguments that the superseding indictment relates back and held that, if the government cannot show in a Kastigar-type hearing that its use of the privileged material before the grand jury was harmless beyond a reasonable doubt, then any time-barred counts in the superseding indictment must be dismissed. Id. (holding that the superseding indictment must stand on its own vis-a-vis limitations). Here, the Court need not wait the results of any Kastigar-like hearing. The government has already conceded that it relied substantially on Defendants privileged information in obtaining the first two indictments. (8/2/2011 Hrg. Tr. 3:24-4:3.) Those indictments are therefore invalid and there is no legitimate peg on which to hang such a judicial limitations-tolling result. Gillespie, 666 F. Supp. at 1141. The policy of repose is especially warranted here. The governments admission that it brought the first two indictments on a flawed interpretation of Defendants privileged information is just the latest overreach on the part of the government. Defendant and his lawyers have been going back and forth with the government for several years. At a certain point, the governments internal documents reveal that it concluded its investigation and determined that it ha[d] not yet been able to find any legal violations in the conduct of Defendants seminars, real estate investing business, and other enterprises, and that Defendants businesses were in compliance with, among others, the Utah Consumer Sales Practices Act, the Postsecondary

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Proprietary School Act, and the Business Opportunity Disclosure Act.1 The government apparently remained concerned with the conduct of persons allegedly affiliated with Defendant, and sought Defendants help to repay some of his companys third-party lenders earlier than contractually agreed, so that those third parties could meet their own financial obligations.2 In this context, the government began making demands Defendant considered heavy-handed, demanding that Defendant agree to turn over control of his company to a state monitor, and at one point threatened to put Defendant in jail if he did not cooperate.3 In response, Defendant went on the radio to accuse the government of lacking respect for the law, engaging in misconduct, and in general acting like commissars.4 From that time, the government has been seeking to criminally prosecute Defendant, apparently taking the position that Defendant should be punished criminally where the civil law admittedly does not apply. Recordings of meetings between Defendant and government officials reveal, among other things, the governments statements to Defendant that this case presents an unusual situation where were trying to find a solution before we get resolved all the factual questions, were all sort of planning without necessarily knowing all the facts, and that even though [t]here [was] no conduct that has been isolated that [Defendant] violated any laws or rules, Defendant would be punished because he had painted [the government] in a corner [by going] on the radio and [having] publicly accused us of stuff and because [h]es got legislators out there trying to cut

Declaration of Marcus R. Mumford In Support Of Defendants Motion To Dismiss Certain Counts Of The Second Superseding Indictment For Violations Of 18 U.S.C. 3282(A) (Statue Of Limitations) (hereinafter, Mumford Decl.), Ex. 1 (UTDOC-20-00102). 2 Id. 3 See Declaration Of Claud R. Koeber Pursuant To 28 U.S.C. 144, at 3, 5, 9, attached and filed with Defendants Mot. [Docket #115-13] (hereinafter Koerber Decl.). 4 Koerber Decl., 5. 5

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our powers because [of] what were doing.5 In this context, the governments investigators admitted to the Utah Attorney General that even the then-contemplated civil action against Defendant was long on conclusions, but short on facts.6 In truth, the case against Defendant has remained long on conclusions for too long; Defendant requests dismissal of the offending counts under the applicable statute of limitations. CONCLUSION The second superseding indictment is obliged to stand on its own vis--vis limitations. Ratti, 365 F.Supp. 2d at 667. As shown above, counts 1, 2, 4, 5, 7, 8, 9, 10, 11, 12, 17, and 18 cannot survive the five-year statute of limitations and therefore must be dismissed. DATED: January 31, 2012 /s/ Marcus R. Mumford Attorney for Defendant

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Mumford Decl., Ex. 2 (FBI302-074-0027 to -0030). Mumford Decl., Ex. 3 (IRSMOI-500). 6