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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