Two men accused of fraud that caused two Delta families to lose their 20-year-old dairy business have been sentenced, according to the Utah Attorney General's Office.
Fourth District Judge Donald Eyre on Wednesday sentenced Jamis Johnson to one year in the Millard County Jail for one count of securities fraud, a second-degree felony. The last six months of Johnson's sentence may be spent in home confinement, the judge said.
Johnson's co-defendant, Paul Schwenke, was sentenced last month to one to 15 years in prison for one second-degree felony count of securities fraud.
On Wednesday, Eyre also ordered both men to pay $150,000 in restitution.
According to court records, Schwenke and Johnson persuaded the families, who owned a dairy business called Milk-King, to sign over their property and equipment in exchange for stock in a company called American Dairy. Schwenke and Johnson then took out a $50,000 loan against the property but failed to make loan payments. The families' property was sold by the lender to cover the loan.
The two men had told the families that American Dairy had "millions available to finance the farm's operations" and promised the families that the company would soon go public and its stock would be worth $5 a share, according to court documents. Those statements proved false.
Johnson had told the families that he was a licensed and practicing lawyer, but he in fact had been disbarred in 2000 for misappropriation of client funds, the court documents said.