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Feds to drop some charges in Jeremy Johnson fraud case

SHARE Feds to drop some charges in Jeremy Johnson fraud case

SALT LAKE CITY — Federal prosecutors intend to drop some of the 86 fraud charges against St. George businessman Jeremy Johnson and four associates as both sides prepare for a complicated trial.

Assistant U.S. attorney Robert Lunnen didn't say which or how many of the counts would be dismissed other than some of the money laundering charges don't apply to all of the defendants.

Lunnen told U.S. Magistrate Judge Paul Warner in a hearing Tuesday that prosecutors want to streamline the case.

"We want to make this quick and as painless for everyone as possible," he said.

Johnson, Scott Leavitt, Bryce Payne, Ryan Riddle and Loyd Johnston were charged in 2013 with 86 counts of conspiracy, bank fraud, wire fraud and money laundering in connection with Johnson's former Internet marketing enterprise, iWorks.

Prosecutors say the company bilked online consumers of nearly $300 million.

The indictment alleges iWorks used numerous websites to tout bogus government grants that were available to stop foreclosures and to pay down debt and for personal expenses such as groceries, home repairs, utilities and Christmas presents. The sites claimed the grants could be accessed through a CD offered for a $2.29 shipping fee.

Many customers who ordered the CDs found they were not as represented and that their credit or debit cards were repeatedly charged for services they didn't sign up for or know about, according to the indictment.

Also Tuesday, a deadline for the five men to accept plea deals from prosecutors passed with none of them taking the offers. Lunnen did not describe details of the proposed agreements.

A four-week jury trial is scheduled to start Sept. 14.

Johnson's attorney, Ron Yengich, asked Warner in a motion last month to lift a 2-year-old gag order in the case. The judge didn't rule on the issue Tuesday but said he would after he receives arguments from both sides.

Warner also has yet to rule on another Yengich motion asking the court to order prosecutors to turn over any information related to potential conflicts of Brent Ward, the former lead prosecutor in the Johnson case. Ward withdrew when questions arose during his bid for the Republican nomination to replace John Swallow as attorney general.

Johnson is a central figure in the criminal charges filed last summer against Swallow and former Attorney General Mark Shurtleff. State prosecutors allege they accepted gifts from Johnson, including use of his house, private jet and luxury houseboat.

Late last month, the Federal Election Commission filed a complaint against Johnson for allegedly making illegal campaign contributions to Shurtleff, Sen. Mike Lee, R-Utah, and Sen. Harry Reid, D-Nevada.

State prosecutors complained that federal authorities undermined an immunity agreement they have with Johnson for information he provided in the criminal cases against Shurtleff and Swallow.

Email: romboy@deseretnews.com

Twitter: dennisromboy; DNewsCrimeTeam