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Jeremy Johnson: Man in the middle of a tangled web

Johnson faces criminal charges and a civil lawsuit involving his Internet marketing company and could be a key witness in the cases against former Utah Attorneys General John Swallow and Mark Shurtleff.
Johnson faces criminal charges and a civil lawsuit involving his Internet marketing company and could be a key witness in the cases against former Utah Attorneys General John Swallow and Mark Shurtleff.
Deseret News/Jeffery D. Allred

SALT LAKE CITY — Jeremy Johnson gained renown in his native St. George as a local boy made good.

With a thriving Internet business that made him a wealthy young man, he had plenty of time to pursue his favorite pastime, flying helicopters. He often helped out local police search-and-rescue efforts in the vast southern Utah red rock. In 2010, he flew to earthquake-ravaged Haiti to transport injured victims to hospitals and deliver food to starving people.

Johnson's exploits made all the local papers, not to mention network news.

As his fame grew, so did federal regulators' interest in his multimillion-dollar online marketing enterprise, iWorks, as well as in his political giving.

The feds hit him from several angles the past five years — a Federal Trade Commission lawsuit, criminal charges in U.S. District Court and a Federal Election Commission complaint.

And then there was the fuse Johnson lit in the office of former Utah Attorney General John Swallow, accusing the first-term Republican of helping set up a $600,000 payment to enlist then Senate Majority Leader Harry Reid, D-Nev., in an effort to get the FTC off his back. State investigations eventually led to public corruption charges against Swallow and his predecessor Mark Shurtleff, a recipient of Johnson campaign contributions.

Johnson's place in that tangled web is unusual in the annals of Utah criminal and political history.

"It's like being famous for all the wrong reasons," he says staring out a 10th story office window. "And then compounded by the fact that I can't articulate what my position is at all. Of course, I don't like being in the center of it."

A court imposed gag-order forbids Johnson from talking about his criminal and civil cases. He was careful in a recent interview to avoid specifics, even though he's acting as his own attorney in the FTC matter because he can't afford counsel. The judge in the civil case stripped him of all his assets, including his prized helicopter.

And he doesn't want to talk about his past life flying choppers, driving Italian sports cars and taking houseboat vacations. Nor does he want to discuss running a business or his philanthropy in Haiti or anywhere else.

Johnson, 39, leads a different life now, one brought on as a consequence of his own questionable actions or one thrust upon him by overzealous government authorities who see him as another white-collar cheat — depending on one's point of view. He is both credible and incredible, believable and unbelievable.

Former Utah U.S. Attorney Brett Tolman said Johnson is in a unique position, although public corruption is typically revealed by someone in or around the deals.

"It's not surprising to me that he also may be someone that has some exposure criminally or civilly and is at the same time providing key evidence or is a key witness in allegations against public officials," he said.

Changing fortunes

Dressed in a T-shirt reading United Karma, khaki shorts and flip-flops on a recent afternoon, Johnson looks like he should be lounging in a hammock. But he's holed up in a downtown office building once occupied by the FBI trying to be his own lawyer in the civil case. He leases space from the law firm that has represented iWorks.

He doesn't get home to St. George much where his wife and daughters live in the same big house be bought when iWorks was raking in millions. He said he hasn't paid the mortgage in years, but court proceedings put foreclosure on hold, making it cheaper to stay rather than rent elsewhere.

While his wife has a paying job, Johnson does not. His legal defense is his job. He pores over documents, surfs the Internet for court cases and writes motions usually well past midnight looking for ways to prove his innocence in a civil trial scheduled for January.

"It's like learning law school on Google basically is what it is," he said, admitting he was lucky to graduate from high school.

Johnson relishes small victories like the judge granting him extra time to file a motion. Though it raises hope in his mind that he might have a chance, he gets crushed when it comes to the finer points of law. He said he understands prosecutors and defense lawyers, but judges are a mystery.

"What I've learned to tell myself is don't get married to some idea or something or some expectation, even though to me it's perfectly reasonable," he said.

Johnson has court-appointed representation in his criminal case, though it recently changed when high-profile defense attorney Ron Yengich quit, citing an undisclosed conflict. Well-known Salt Lake attorneys Rebecca and Greg Skordas were assigned to his case.

Johnson and four associates would be on trial this month if it weren't for the attorney switch, which pushed the trial to February. They face up to 86 counts of wire fraud, bank fraud and money laundering in connection with iWorks.

Recently, court documents show federal prosecutors used a sealed search warrant to grab 4,000 emails between Johnson and his attorneys. Those records would be protected under attorney-client privilege. Prosecutors claim they separated the emails from evidence they intend to use at trial, according to court documents.

Tolman calls that "alarming" and said Johnson is right to argue that something doesn't smell right.

"The problem is not a lot of people have sympathy for Jeremy because they think he's already a crook with his ties to Shurtleff, his ties to Swallow, and the business he was in," he said.

Johnson, Bryce Payne, Scott Leavitt, Ryan Riddle and Loyd Johnston were initially indicted for allegedly creating 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 gifts. 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 charges.

A revised indictment — the fifth against Johnson since 2011 — eliminated the consumer fraud allegations and centers on bank fraud, alleging Johnson and other executives set up a series of straw companies to continue to charge customers' credit and debit cards after credit card firms started to fine iWorks for excessive customer chargebacks.

Many buyers of iWorks products, including those offering help in making money through Internet advertising, called their banks or credit card companies to dispute the charges and have them reversed, according to the indictment.

Payne and Riddle are now arguing that the U.S. Attorney's Office agreed not to prosecute them as part of a failed Johnson plea deal in January 2013. Their names, along with Johnson's parents, friends and former Attorney General Swallow, were among those Johnson wanted protected from prosecution.

The deal fell apart during a bizarre court hearing when prosecutors balked at submitting a list to the judge. But lawyers for the men argue federal prosecutors agreed in court not to go after them even if Johnson didn't plead guilty. Prosecutors contend there was no agreement because Johnson didn't enter the plea.

Attorneys general

Johnson's grenade on Swallow landed the day after the hearing. He accused Swallow — in his first week on the job — of being involved in a plan to pay off Reid in hopes of ending the FTC investigation into iWorks.

State investigations ultimately resulted in criminal charges against Swallow, some based on Johnson's allegations. Shurtleff, too, faces charges related to his association with Johnson. Swallow and Shurtleff have maintained their innocence.

Johnson pauses before answering questions about the two men with whom he was once friends.

"Probably the best thing I could say is I certainly understand the position they're in," he said. "I do have regrets. My role, my involvement caused a lot of what's happened to them."

Johnson likely would be called to testify should Swallow and Shurtleff go to trial. He said what he's going through is probably good for them if he takes the witness stand.

"I won't lie as a witness. I won't make anything up. I'll just say what I know and that's it," he said.

Tolman said he thinks Johnson has real and valid evidence that could decide whether Swallow and Shurtleff are guilty or innocent.

"There's an assumption that if there's a crooked politician, for the lack of a better way of saying it, then it can't be the knight in shining armor that actually has all the evidence," he said. "It's got to be the one that was willing to get into the mud with them."

Johnson said despite evidence to the contrary, he hasn't tried to incite controversy.

He has refused to settle with the FTC and rejected a plea bargain in the civil case, but says he would now advise people "to give them whatever the heck it is they want" and be done with it.

Johnson said he doesn't know what he'll do after all those cases run their course, and he finds out whether he's headed to prison.

"Well, I guess it depends on how it ends," he said. "Sometimes I think about just being like a farmer or something, as far from what this life is as I can get. Sometimes I think it would be fun to go start a business again. … Like I say, it just depends on how it ends."

Email: romboy@deseretnews.com

Twitter: dennisromboy