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Rick Egan/The Salt Lake Tribune Attorney Jerry Mooney, left, Rick Koerber and Michelle Koerber, leave the Federal Courthouse on Friday after Rick Koerber made an initial appearance on a federal criminal indictment that charges he ran a large fraud operation that took in at at least $100 million from investors.

The attorney for a Utah County man accused of running a scam that brought in at least $100 million indicated Friday he will portray his client as a victim of the crash of the real estate market that took down such powerhouse firms as Bear Stearns.

Jerry Mooney, court-appointed attorney for Claud "Rick" Koerber of Alpine, said that in such crashes, investors look to place blame on something other than economic conditions.

"Somebody always wants to blame somebody else for their financial losses," Mooney said after Koerber's initial appearance in federal court.

Koerber pleaded not guilty Friday to three counts of mail fraud, wire fraud and tax evasion. Federal prosecutors allege he took in $100 million of investors' money that was supposed to go to buy under-priced real estate but then used more than half to pay off earlier investors in a Ponzi-type scheme. Investor money also was spent on expensive cars, restaurants, movie making and Koerber's own housing, prosecutors say.

Koerber has vigorously denied the allegations to the point of calling a news conference to plead his innocence after the indictment was announced.

Federal Magistrate Sam Alba admonished Koerber on Friday not to make any more public statements about the case. Alba also directed Koerber to hand over his passport, which he brought to court after prosecutors previously demanded its surrender .

Koerber also told Alba he would dispose of any guns in his possession by the end of the day to comply with another government request.

According to prosecutors, Koerber used seminars promoting his "Equity Mill" real estate investment methods, phone calls, mailings, radio programs, Web sites and advertisements to communicate with potential investors. On money provided to one of his companies, Founders Capital, Koerber generally paid 5 percent per month.

In an interview before his indictment, Koerber said investors' money, for the most part, did not go directly into Koerber's companies, but rather through a series of companies run by other people. Legal documents say the heads of those other investment funds sometimes encouraged investors to recruit others to invest and were rewarded with a part of the interest payments on that new money .

In the interview, Koerber denied that he had any substantial ties to those other investment companies and did not know what investors had been told or promised as far as how their money would be used or what interest rates they would receive.

Koerber's contention of his arms-length relationship appears to be one of the keys to the case, along with where the money from investors was spent.

Koerber operates the Web site and has been a conservative commentator on K-Talk radio, as well as a supporter of the school voucher movement in Utah. His indictment ignited a public controversy between the Department of Commerce, whose investigators had probed Koerber's operations, and the office of Utah Attorney General Mark Shurtleff, which declined to file a civil complaint saying it never received evidence to support a case.

The decision not to pursue a civil complaint came on the heels of a series of meetings that Rep. Carl Wimmer, R-Herriman, arranged with several powerful officials, including then-House Speaker Greg Curtis and Shurtleff.

It also came shortly after the legislative auditor -- at the request of Wimmer and Rep. Jim Bird, R-West Jordan -- had launched an audit of the Commerce Department's Securities Division, which was part of the investigation.

Government prosecutors on Friday turned over to Mooney six DVDs of evidence collected during the FBI and IRS investigations, along with one disc of interviews recorded by investigators. Assistant U.S. Attorney Stewart Walz, who is prosecuting the case, said the investigation was continuing.

What's next?

Rick Koerber's next court appearance is set for Aug. 31.