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Third associate of indicted Utah businessman faces sentencing

Published May 7, 2012 7:26 pm

Charges • Business partner of Rick Koerber pleads guilty to tax avoidance.
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A third former associate of indicted Utah County businessman Rick Koerber is facing charges in federal court.

Stephen A. Freestone has pleaded guilty in U.S. District Court for Utah to two counts of failure to file a federal tax return.

Freestone was one of the people who started FranklinSquires Cos. LLC with Koerber, according to a company blog.

Koerber faces 20 charges in federal court for his allegedly fraudulent operation of a real estate investment operation called FranklinSquires Cos. and the related company Founders Capital. He has pleaded not guilty, but no trial date has been set.

Freestone's Five Pillars Investments LLC also is associated with the Koerber operations, according to court documents.

Freestone was listed along with Koerber and others as founders of The Free Capitalist Project, an effort to promote economic liberty as the foundation of freedom.

In a plea deal with Assistant U.S. Attorney Stewart Walz, the lead prosecutor in the Koerber case, Freestone admitted he intentionally failed to file tax returns for 2004 and 2005.

As a part of the agreement with federal prosecutors, Freestone agreed to make restitution, the amount of which is still to be determined. Freestone faces up to one year in federal prison for each count, but no sentencing date has been set.

Other former Koerber associates have been indicted in federal court:

• Jason K. Vaughn was charged with running a Ponzi scheme that promised a safe investment and 3 percent interest per month. The operator of Freestyle Holdings LLC told investors the money would go into Founders Capital for investment in real estate, according to the indictment.

• Gabriel S. Joseph, who was indicted in February on charges of wire fraud and money laundering. He had pleaded not guilty, and his trial is scheduled for later this month. Joseph also faces a misdemeanor tax charge, and the trial in that case is set for June.

Walz also is one of the prosecutors in the Vaughn and Joseph cases.




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