Feds intend to drop some charges in Jeremy Johnson fraud case

ST. GEORGE – As both sides prepare for a complex trial, federal prosecutors said Tuesday they intend to drop some of the 86 fraud charges against St. George businessman Jeremy Johnson and four associates. 

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 Inc., where they allegedly bilked online consumers of nearly $300 million.

Assistant U.S. Attorney Robert Lunnen told U.S. Magistrate Judge Paul Warner in a status conference Tuesday that prosecutors want to streamline the case, making it as quick and painless for everyone as possible, according to a report by the Salt Lake Tribune.

Lunnen said some of the money laundering charges don’t apply to all of the defendants but didn’t say which or how many of the counts would be dismissed.

The indictment alleges iWorks used numerous websites to tell customers they could access government grants that could help reduce debt, stop foreclosures, help with home business startups, pay utility bills and even buy Christmas presents, among other things.

The way clients accessed the grants, according to court documents, was through a free CD said to contain “everything you need to know to obtain your government grant.” Consumers just had to pay $2.29 for the shipping cost.

Federal prosecutors allege consumers discovered the CDs were not what they expected and that their credit and debit cards were being charged — not only for the shipping fees, but a monthly membership fee as well, services they say they didn’t sign up for or know about.

A deadline for the five men to accept plea deals from prosecutors passed Tuesday with not one of them taking the offers although counsel for all parties in the federal case did appear at Tuesday’s status conference.

A handful of motions are pending for decision before trial, including a motion filed by Johnson’s attorney, Ron Yengich, June 24 asking the court to withdraw a 2-year-old gag order.

In that motion, among other things, Yengich argues that while the defendants have been subject to a gag order, representatives of the United States Attorney’s Office have freely shared information with the Federal Trade Commission in its civil action pending in Nevada, that in doing so, information has been disseminated to the public that serves to put prosecutors in a favorable light to the defendants’ disadvantage.

“The representatives of the FTC have, by their fillings (sic) and the public statements of representatives,” the motion states, “portrayed Mr. Johnson in a negative light, while at the same time casting themselves of (sic) protectors of public welfare.”

Johnson argues it taints the prospects of an unbiased jury. Specifically, his motion states:

Since the entry of the order, Mr. Johnson and his defense team have not responded to numerous newspaper articles, television and radio reports, and internet reports, many which place him in an extremely negative light and have given the government an unfair advantage in the court of public opinion, and may well have made selection of a fair jury in the instant case impossible for Mr. Johnson and the co-defendants in this case.

The judge didn’t rule on the issue Tuesday but said he would after he receives arguments from both sides. The prosecution has yet to file opposition to the motion.

Another status conference in the case is set for Aug. 7, a final pretrial conference for Aug. 28 and a four-week jury trial is scheduled to start Sept. 14.

St. George News Editor-in-Chief Joyce Kuzmanic and Senior Reporter Mori Kessler contributed to this report.

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Email: kscott@stgnews.com

Twitter: @STGnews

Copyright St. George News, SaintGeorgeUtah.com LLC, 2015, all rights reserved.

 

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8 Comments

  • KarenS July 1, 2015 at 2:34 pm

    Don’t worry, there will still be plenty of charges left.

  • Bender July 1, 2015 at 4:11 pm

    Home town hero. Was beloved by local politicians and law enforcement. Perverse Robin Hood — stole from the stupid, gullible and foolish and showered his friends with gifts. This punk ginger needs to serve hard time if for no other reason than to beat it into the heads of the rest of the lowlifes in the local business community that fraud ain’t cool.

    • mesaman July 1, 2015 at 7:37 pm

      All the adjectives you used to describe the “victims” seem appropriate but there is one more characteristic to add; greed and avarice. Had these gullible and foolish folks not been looking for a quick buck they wouldn’t have been fleeced. But, to their defense, the scam might have included the insidious little $5 or $10 fee added on to your credit card and withdrawn monthly. For what? You would have to research it through your card company and/or bank then follow the procedures to dispute it. Neat little gimmick, take a nickel here a dime there and they’ll never even notice it. Intentions to drop any charges should make the victims feel a sense of justice.

      • Brian July 2, 2015 at 8:44 am

        You’re wrong about the victims. They were honest people that wanted to start honest businesses, across the board (I can’t think of a single exception, though I’m sure there are some). Their only mistake was getting into a very technical business with people over the phone (it’s hard enough in person). That industry is a black spot on southern Utah, and those involved are the opposite of the victims. I can’t think of a single person I know that worked in that industry that I’d do business with.

  • KarenS July 2, 2015 at 7:48 am

    Actually both Bender and Mesaman’s characterizations of the victims are incorrect. While there have been few news stories about them, some local papers have described some like the teacher who just wanted to purchase extra books for her students and figured $2.99 wasn’t too much to spend to get some ideas on how to earn extra money. The hidden upsells and tricky descriptions on the ordering page would confuse most of us. I think she ended up being charged $800 or so before she was able to stop the scam.

    And remember that a lot of Johnson’s money was made during the height of the recession. There were a lot of desperate people who needed to pay their mortgages and buy food, etc. The small fee of $2.99 for ideas on how to earn extra money didn’t seem bad to them until they got their bank statements and found out about all the new charges. Let’s not blame the victims here. (I’m not one, by the way.)

    I’d still like to know how Johnson’s claim of setting up over 100 straw companies after the banks found out about all the chargebacks is some kind of industry standard. Looking forward to the trial.

    • Bender July 2, 2015 at 11:52 am

      At the very least the adjective gullible applies to anyone who would respond to the web-based come ons that generated about a quarter billion dollars in revenue. This in no way excuses the unethical and criminal behavior of local parasites like Johnson but I suspect it helps sooth the consciences of anyone who was, or is, involved in this chicanery.

  • htown July 2, 2015 at 11:27 am

    The Salt Lake papers are trying to make his philanthropic efforts into something they are not. It’s easy to use OPM (Other Peoples Money) to make yourself look good.

    Divide 300 million five ways and it is easy to see why he could lay down tens of thousands gambling every month in Mesquite and Vegas and still have plenty left over for his two helicopters, lavish houseboat and several properties.

    The Feds will have plenty of ammo even if they drop half of the 80 some odd charges.

    Yengich is complaining over the gag order, but seems to get plenty of press over the illegal political contributions, (Again OPM), to the former AG’s in Utah…hard to have it both ways.

  • fun bag July 2, 2015 at 12:54 pm

    “MESAMAN” , a lowlife idiot like you probably has your own set of scams going. You’re always first up to defend the scum of society…your own kind i guess…

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